Hundreds of women entrepreneurs in Senegal who have suffered devastating loss in business as a result of the pandemic are beginning to regain their livelihoods thanks to a new emergency fund set up by ENERGIA, the International Network on Gender and Sustainable Energy. The fund will provide 69 companies (comprising 594 women entrepreneurs) much needed financial support to restart their stalled activities.

The women are among 12,000 entrepreneurs, who are being supported through the Empowering Women, Engendering Energy programme, which Energy 4 Impact runs in Senegal with funding from ENERGIA. They have seen an average drop in their business turnover of around 75% over the last eight months due to travel restrictions, market closures and bans on public gatherings.

Before the pandemic struck, the women had successful, healthy businesses, using solar technology to increase their productivity and improve the quality and value of their products and services – such as solar-powered irrigation for market gardens, solar presses and driers for food processing, and solar freezers to prolong the shelf-life of food stock. Despite the recent lifting of emergency measures and the resumption of economic activities, many entrepreneurs have been facing overwhelming challenges before they can get their businesses back on track.

Few of the government intervention mechanisms at local or national levels are available to the entrepreneurs, many of whom are in the informal sector and are based in rural areas. Their faltering businesses have jeopardised their livelihoods and their families’ welfare as many of these women are main household breadwinners.

Thanks to the ENERGIA emergency, solidarity fund, Energy 4 Impact is helping some 594 women entrepreneurs from 69 companies and cooperatives who have been most severely hit to bounce back.

The fund, totalling 43.5K euros, will be used to help struggling entrepreneurs to:

• repay the loans’ arrears they have built up over the first six months of the pandemic;
• replace any faulty parts of their solar equipment such as pumps, batteries, converters and PV panels;
• free up some working capital to buy raw materials and inputs essential to restart their commercial activities.

“Women are disproportionately affected by economic shutdowns because they are more likely to run small, informal businesses as self-employed workers. Informal sector and low-income, female-headed households and women living in rural and remote areas are among the most vulnerable groups affected by social distancing and unemployment. This fund is a lifeline for them,” says Jean Cesar Ndione, Business Development Coordinator at Energy 4 Impact.

In addition to a big drop in customers, the businesses have also experienced interruption in raw material supplies and considerable hikes in price. Those who still manage to make any profit use the money towards the cost of their most urgent household’s needs, and then have nothing to meet their business needs.

For others, commercial activities have come to a complete standstill. The women involved are struggling to cope with the compound financial burden of keeping their businesses afloat, paying their staff, honouring their credit repayments, or replacing broken parts of equipment with no income coming in.

“In the first few months of 2020 we recorded high credit repayment rates, about 88%, among women entrepreneurs. However, the situation rapidly deteriorated after April when measures to tackle the pandemic took hold. Creditors started to see a big increase in their outstanding payments, with a doubling over the summer months. Many technology suppliers who provided equipment on credit are now facing a cash flow crisis. It has also increased the risk of cash outflow among the microfinance providers,” says Jean Cesar Ndione.

These are hardworking women, who were on a path to really make a difference to their lives before the pandemic. With our efforts combined, we can help them bridge these challenging times, and make them more resilient going forward.

Financial relief gets Fatou back on her feet

Fatou Thioune owns a market garden in Mboro, Western Senegal. Thanks to a partnership that Energy 4 Impact created a year ago between a micro-finance institution and a supplier of solar irrigation systems, Fatou was able to buy a solar irrigation pump on credit to improve business productivity.

Fatou usually sells the vegetables she grows at the local market but, with market closures during lockdown, she lost access to her customers and had to resort to selling her vegetables on her doorstep before they rotted, but at such a low price that she made a loss. Fatou was under severe stress with the financial pressure of still owing 900 Euros to her creditors but not having enough savings to both repay her debts and reinvest in her business to restart her activity.

Now she is getting back on her feet again. Thanks to the solidarity fund, she will receive a financial contribution to cover both the cost of the credit repayment and free up some cash to build a water storage basin and optimise water management for irrigation to drive her business forward for the future.

Cool capital for cooperative restart

The GIE BAMTARE is a cooperative of 200 women who process and sell pulped fruits and juices. Located in the remote village of Diarre Mbolo in Tambacounda, Eastern Senegal, the business relies heavily on solar freezers. When some of the cooperative members fell ill, they were suspected of having contracted coronavirus. In order to contain the spread of the virus, the village chief banned all juice production and sales. The cooperative’s turnover plummeted.

The solidarity fund will provide working capital for the purchase of raw materials, packaging, and coolers to help them get back into business. They will also purchase a bicycle to prospect the clientele of the surrounding villages to bring in new customers.

Seven of the women entrepreneurs in the cooperative, who use solar freezers to preserve fresh foods and juices, will be funded to replace faulty equipment. Equipment maintenance is an issue that makes them vulnerable when both working capital and cash flow dry up and they are unable to replace faulty parts as they break down. Thanks to the fund, they will receive six new pumping systems, and one new freezer. A further 12 women will receive 12 new batteries.

Now they are well on the road to restart production.

Digital transformation

With information and communications technologies playing an important role worldwide in ensuring the continuity of business and everyday life during the pandemic and resulting lockdowns, access to technology has been vital. But the gender digital divide has been more apparent than ever. There is a persistent mobile gender gap in low- and middle-income countries, where women are 10% less likely than men to own a mobile phone and 23% less likely to use mobile internet.

The pandemic highlighted how few of the women entrepreneurs had smartphones or tablets, so a digital transformation of their businesses is a vital tool as they reopen.

That is why one focus of the solidarity fund will be to increase the women’s use of digital technologies. The beneficiaries will be provided with tablets and trained in how to collect and use economic data related to their commercial activities so that they can monitor their business performance.

Members of the Energy 4 Impact team will work with the entrepreneurs to increase their digital skills, using their smartphones and tablets to share coronavirus-related information; transfer money through mobile-enabled payment platforms; develop their customer base; market and sell products online with the help of social networks; and share video and audio material.

“It is important now, more than ever, to close the digital gap to help women entrepreneurs cope with economic stresses of the pandemic,” says Jean-Cesar.
“Since the majority of the businesses we support don’t have access to smartphones and charging facilities, this is a key area where we can help their business recovery.”

Extended benefits

Energy 4 Impact is working closely with all the entrepreneurs who are beneficiaries of the fund and providing tailor-made support to facilitate the relaunch of their businesses, to strengthen their resilience to multiple risks and to help them build back their businesses.

“We expect to see a 50% increase in income for the 69 target groups benefiting from the Covid-19 recovery fund within the next six months. The impact will extend beyond their businesses, benefiting the 4,752 family members of the 594 women entrepreneurs,” says Jean-Cesar.

“With their sustainable companies, they contribute to a cleaner world. They are at the forefront of the fight against energy poverty, inequality and climate change,” he said.

*This article was developed by our partner Energy 4 Impact. You can access the original article here.