Dar es Salaam - Mshindi Mayenga, a hairdresser in the Tanzanian capital, had a vision to expand her business.
She wanted to transform her small salon from a dilapidated rented room into a larger “main street” enterprise, but every time she applied for a bank loan her request was turned down.
She did not own her home, or any land, and had no assets to serve as collateral for the loan. “I was asked to present valuable assets to support my application but I did not have any,” she said. After a long struggle, the 31-year-old entrepreneur from a bustling Dar es Salaam suburb managed to secure a piece of land on loan, which in turn helped her to access the finance she needed.
Mayenga is among thousands of low-income women entrepreneurs in Tanzania who have acquired registered land on loan, which they can use as security to seek finance to grow their businesses. As part of its broader policy to empower women, Tanzania Women's Bank (TWB) has started lending registered plots of land to female entrepreneurs as a way to lift them from poverty.
“I am very happy to buy a plot of land through this arrangement, my loan was approved within days,” Mayenga told the Thomson Reuters Foundation. “I have already started building my house in Kigamboni where my new plot is located, and I hope to use my land title to borrow 10 million Tanzanian shillings ($5 000) to expand my businesses.”
Despite shouldering the burden of family responsibilities and making up half of the agricultural workforce, women in Tanzania face discrimination when it comes to property rights, campaigners said. Although Tanzanian law grants women the same rights as men to access, own and control land, and allows them to participate in decision-making on land matters, only 20 percent of women own land in their own names, according to USAID.
Prospects for women
Women's land rights are set out in the Land Act and the Village Land Act of 1999, which state: “The right of every woman to acquire, hold, use and deal with land, to the same extent and subject to the same restrictions be treated as a right of any man.” But Tanzania's customary norms make it difficult for women to own land in their own right. Instead many access it through their spouses or male relatives, meaning they often end up losing it if the men die.
Laws are poorly implemented, denying many women their land rights, campaigners say. A knock-on effect of this is that women have problems accessing credit to enable them to expand small-scale enterprises. Women's businesses tend to be smaller, have fewer employees and poorer growth prospects than those owned by men. TWB, in conjunction with Ardhi Plan - a real estate company - is hoping to improve prospects for women entrepreneurs by lending low-cost land.
“We have realised that most women fail to get bank loans because they don't have immovable assets as collateral,” Margaret Chacha, TWB Managing Director, told the Thomson Reuters Foundation. Since the project started a year ago, more than a thousand women entrepreneurs in Dar es Salaam have secured land loans, the bank said.
“We urge women entrepreneurs to seize this opportunity to acquire the plots and get their title deeds which they can use to get capital loans,” Chacha said. Borrowers are required to deposit at least 30 percent of the plot's value and pay the rest in installments until they have paid off the loan and own the land outright.
Campaigners have praised the initiative as a model for empowering women entrepreneurs, not just in Tanzania but across East Africa. In Uganda, a similar project was launched by the Development Finance Company of Uganda in 2007 to help women obtain loans to purchase property to use as collateral. “I think it is a positive step given that land is an asset whose value appreciates every single day,” said Jane Magigita, the Executive Director of Equality for Growth, an NGO that supports women in the informal sector.
Land registration is a cumbersome process in Tanzania, riddled by corruption and mismanagement, which is why most people lack formal rights to their land, according to Transparency International's 2013 Global Corruption Barometer.
In Dar es Salaam, almost 70 percent of the city's 5 million inhabitants live in informal settlements. But Marina Agostino, who bought a 600-square-metre piece of land under the new scheme, said she found it easy to access land through the TWB. “It is hard to get land through official government channels because of bureaucracy and corruption,” Agostino said.
“I haven't started construction yet but I intend to build a modest house to rent it out so that I earn more income to invest in my food catering business.”
THOMSON REUTERS FOUNDATION