Monrovia — The Standard Bearer of the opposition Collaborating Political Parties (CPP) Alexander Benedict Cummings has outlined factors responsible for the strangulation of women-owned businesses in Liberia with a vow to provide US$10M to help address the situation following his ascendancy to the Liberian presidency.
Mr. Cummings is expected to contest the ensuing presidential and legislative elections scheduled for Tuesday, October 10 this yer the numerous constraints and marginalization of women to
He observed that for several decades Liberian business women continue to create job opportunities for their fellow compatriots and others through their respective businesses.
He made these comments when he addressed scores of local women entrepreneurs in Monrovia on Wednesday, April 12.
Mr. Cummings emphasized that despite the significant role women businesses play in economic growth, job creation, and social empowerment, very little has been done, in a sustainable and practical way, to help them grow and prosper.
He said business women, both young and old, are crying for help in the own country because, they are not actively participating in the economy due to several factors.
Challenges
Mr. Cummings indicated that owners of many small businesses continue to complain that their businesses cannot grow because of the lack of access to finance, limited skills and technical capacity; and limited access to market opportunities.
He maintained that the cost of borrowing money from commercial banks is just too high in post conflict Liberia.
"For Example, the current interest rate charged by commercial banks on a loan is 13.5%, in addition to a 2% one-time payment for bank service charge. On top of that, only a 30-day window or grace period is given to begin loan repayment. So, just imagine, for a minute, a small business owner or an entrepreneur with great ideas trying to expand or start a business, She receives a loan from the bank to help import a container of goods from overseas as part of the business plan. On average, the container takes six weeks to come to Liberia, If you factor port clearing and stocking in the warehouse, you are looking at about 10 weeks at the minimum, but this small businesswoman is expected to start paying back the loan in 4 weeks."
He noted that the difficulty in accessing finance does not only put strain on the growth of the business, but it also increases the likelihood of default on the loan.
According to him, the situation is forcing many entrepreneurs to turn to alternatives to finance their business plans, including reliance on their own savings from su-su clubs, micro-loans, and loans from friends and other lenders in the informal sector that charge them as high as 25% interest.
Lenders refusing to give loans
Mr. Cummings further observed that commercial lenders are reluctant to extend credit facilities to small businesses because of the perceived high risk of lending.
He added that these lenders continue to cite weak and unmarketable business plans, low cash flow of small businesses, inadequate collateral, and the failure of many businesses to pay back their loans as factors preventing them from borrowing their monies to local business women.
In other words, he stated that these commercial lenders main excuse is that many small businesses lack sufficient experience and technical capacity to develop marketable business plans and also lack managerial skills to effectively run a small business.
"Although in some cases, these are genuine concerns, they are not a sufficient basis to keep Liberian businesses, and women
Businesses, perpetually down. It is the responsibility of a sensitive and responsible Government to intervene to help our struggling mothers, daughters and sisters."
Promises
He assured that a CPP administration under his leadership will fix these problems and help women grow their businesses.
He maintained that his administration will take several immediate steps upon assuming office.
As part of those steps in the first 100 days, Mr. Cummings disclosed that his government will invest directly in lending institutions to provide financing and loan guarantees for small businesses, including the provision of US$10million
"We will also set up special guarantee schemes for SME's to reduce the risk for financial lending institutions. Through the Ministry of Commerce and Industry and the National Investment Commission, we will invest in and/or
support Business Development Programs to build the capacity of small businesses, particularly those owned by women, to build the capacity, access finance and manage their businesses."
He further pledged that his government will also negotiate with commercial banks, through the Central Bank of Liberia (CBL), for concessionary interest rates for businesses, particularly those owned by women entrepreneurs.
"Women entrepreneurship will lead to women empowerment. It will increase the confidence and self-worth of women in decision making that affects themselves, the family, and the nation."
He added that "our business-linkage programs will include a margin of preference for female owned and operated businesses."
Mr. Cummings, however, used the occasion to disclose that in the coming weeks and months, the CPP will be talking about its overall strategy for Private Sector Development and Inclusive Economic Growth.
"Our country cannot remain as if God has assigned poverty to us. Not at all. God has blessed us with many good things. It is up to all of us to make it work for ourselves, our children and our children's children. We cannot keep doing the same old thing and expect different results."
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He stressed that the CPP views women entrepreneurship and business development as very critical to accelerating Liberia's development.
He added that when elected into office, his government will prioritize women in business as a central pillar for the transformation and revitalization of the country's struggling economy.
"As a business person and former corporate executive, I know firsthand the significant impact women entrepreneurship can have on the social, economic, political and cultural development of our Country. Through your business and entrepreneur activities you will bring in more family income to increase the welfare of your household. You will make it easier for "papa to come home" with a smiling face."
"Let me pledge to you today, that under the CPP we will work every day to ensure that you succeed in your business and entrepreneurship endeavors. This is our area. We know how to do it and we will do it."
Mr. Cummings noted that when women are empowered in business, they will also set the stage for rapid growth and inclusive economic development.
Mr. Cummings encouraged Liberians not to see the ensuing October elections based on second chance; but one that should be about real change which the CPP, according to him, is ready to bring.
