Starting and successfully running a business in Zimbabwe, is no joke, more so for young female entrepreneurs. Whilst there is an abundance of ideas floating around, much needs to be done to ensure that there is adequate financial support for female entrepreneurs.
Financial support, in the startup arena, comes in different forms. Grants, loans, angel investors, crowdfunding, venture capital, or good old bootstrapping. Whatever, the case a well-structured financial plan allows entrepreneurs to focus on other aspects of growing their company. This is not always easy, especially in the Zimbabwean context. There are support networks, dedicated to providing necessary support for startups and SMEs.
A lot of Zimbabwean investors still rely on older models to valuate SMEs they want to invest in. For example, some venture capitalists will tell you that they only invest in brick and mortar businesses. This doesn’t make sense at a time when most businesses have gone virtual, especially during the lockdown period.
Support through SACCOS
Pearl Mbazima, an accountant and entrepreneurship consultant, co-founded entrepreneurs.co.zw. The aim was to train female entrepreneurs, create networks, showcase their work, and fund their business growth. They did this by starting a Savings and Credit Cooperative that gives their members a form of financial security.
The SME Association of Zimbabwe (SMEAZ) defines Savings and Credit Cooperatives (SACCOS) as:
Bodies created by a group of people with a common interest (churches, workers’ unions, community groups e.t.c.), whose objective is to save collectively, then make loans available to the group’s members.SME Association of Zimbabwe, https://www.smeaz.org.zw/
Ladies Savings and Credit Cooperative (Lasacco) is an initiative to financially liberate women and girls in entrepreneurship. It does this by offering them loans and credit facilities.
Traditional financial and microfinance institutions come up short when it comes to offering solutions for startups. Startups have a different DNA and as such need a different approach to financial outlook. Pearl shared her thoughts and how her company is helping entrepreneurs.
“The current financing models are obsolete and need to be re-evaluated… As they need some form of security, which a lot of female entrepreneurs do not possess. But even if they do have it, they need it for their day to day business operations.”
How does Lacasso work?
The Lasacco mantra is “security is your social circle or network.” By joining Lasacco, you are required to join their social media and networking groups so you build relationships with the other women. During these events, they create bonds of trust with fellow members. This then paves the way for them to access loan facilities.
“When you need a loan, those people are the ones who will guarantee you with their savings. So if you want to borrow $10 000, the total savings of the members that guarantee you, should be $10 000. By guaranteeing you, they are essentially saying Lasacco can take our savings to cover the loan.”
To join the cooperative, members must pay a joining fee of US$39. All members must be shareholders by buying at least one share, which is US$5 per share. There is also a monthly subscription fee of US$3. It is mandatory for all members to save at least US$10, per month to ensure continuity of the cooperative. After a 3-month period, members are then eligible to apply for a loan.
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