Dear Mr. President, grow Africa’s economy by shrinking the gender gap


by Holly Frew

Milca lives in Kobodo, a small town in western Kenya close to where President Barack Obama’s father was born. Just 24, Milca, her husband and two small children barely made ends meet on her husband’s income. Milca is great at styling hair, and believed she could earn money doing it, but starting a hairdressing business requires money for supplies and basic equipment. She didn’t have the money and no bank was willing to loan it to her. She and her husband didn’t even have a bank account.

Her fortunes began to turn when she joined a CARE Village Savings and Loan Association (VSLA). Milca received financial management training and began saving money, starting with just a few cents each week. As the group’s pool of savings grew, members began loaning their savings to each other for small enterprises such as buying seeds, fertilizer or, in Milca’s case, buying the tools and hair care products she need to become a professional hairdresser.

When the door of opportunity opened, Milca ran through it. She quickly earned four-times the amount of her loan, paying it back to her group with interest. Today she is a professional hairdresser, earning money to support her family alongside her husband.

“This is just the start,” says Milca. “I’m going to start selling cosmetics and beauty products to make even more money.”

Milca’s situation isn’t unique. 80 percent of Africans have no access to financial services. There are tens of millions of Milcas whose ingenuity and ambition are thwarted simply because the basic financial services the developed world takes for granted are not available to them.

CARE started the first Village Savings and Loan Association 24 years ago to give people like Milca the essentials tools to begin crafting their own solutions to poverty. Today the average CARE VSLA member saves $58 per year – a modest amount by developed-world standards, but a huge number in sub-Saharan Africa, where an estimated 388 million people still live on less than $1.25 per day. Multiply $58 by the 720 million unbanked people in Africa is $42 billion – local money that has the potential to power economic growth in the world’s poorest communities.

On July 24-25, President Obama will visit Global Entrepreneurship Summit in Nairobi, an annual gathering to help accelerate economic development in the developing world by connecting emerging entrepreneurs with established business leaders, international organizations and governments. CARE hopes that President Obama and other leaders at the gathering keep women like Milca top-of-mind when they think of entrepreneurs. Policies that improve women’s access to financial services will power economic growth and reduce extreme poverty.

“Globally there’s been an increase in financial inclusion, and East Africa has been leading innovations that are fueling this movement, but women are being left behind,” said Lauren Hendricks, director of Access Africa, CARE’s Village Savings and Loan Association program. “Women flourish at microfinance, and have the potential to do so much more when given the opportunity.”

CARE’s VSLAs are open to all, but 70 percent of members across the continent are women. One reason so many women are turning to VSLAs is because, too often, there’s nowhere else to turn.

“When trying to make transition from a micro to small or medium-sized business, women are being held back for a variety of reasons,” says Hendricks. “Lack of land rights, gender biases in some financial institutions and disparity of domestic responsibilities are chronic issues that need to be addressed.”

CARE pioneered the VSLA in Niger in 1991 as a way to harness the ancient practice of group savings. Nearly a quarter-century later, there are 203,000 VSLAs in 26 African countries and other nations around the world, empowering nearly 4.7 million people, mostly women. With their savings and access to small loans, they’re growing their livelihoods, paying for doctor’s visits, improving their homes, sending their kids to school and investing in the future of their families.  

“As President Obama visits Kenya and other countries in Africa to discuss how to grow the economy, our hope is that they consider building more public private partnerships like these that create greater access to formal financial services; as well as, solutions for closing the huge gender gap that currently exists,” said Hendricks.