GOAL 2: FACILITATE ACCESS TO RISK-MANAGEMENT AND FINANCIAL SERVICES

Women in agribusiness in East Africa are under increasing pressure to jump on the global trade bandwagon as markets liberalize and integrate. But their ability to leap is restricted by a severe lack of access to financialservices. Constraints to cash flow and risk management must be addressed if women in small- and medium-sized enterprises are to prosper in exports.Goal 2 targets two key objectives, which are to:

• Coordinate options for credit
• Facilitate access to risk-management services

AWAN-EA’s strategy involves building relationships with reputable institutions to increase members’ opportunities to obtain credit and risk-management services. Our efforts to coordinate options for credit aim to enable members to take advantage of new and profitable orders. Without adequate credit, entrepreneurs face huge challenges in maintaining healthy cash flows. When farmers and processors need payment, but overseas buyers have yet to settle their accounts, exporters often are stuck in the middle. Access to credit can bridge this temporary financial gap. In addition, entrepreneurs need capital to improve and enlarge their facilities. AWAN-EA stimulates credit options by:

• Forging partnerships with financial providers
• Linking members to partner institutions
• Facilitating workshops on financing international trade

In addition, AWAN-EA is working on long-range plans to develop a “factoring facility. ” The plan involvesestablishing an endowment fund and using earnings from the principal to provide short-term loansfor members.

A second critical aspect of conducting global trade is managing risk. Whether it’s financial risk—foreign currency exposure, exchange controls and commodity price fluctuations—or other risks, like political instability, African women need tools and techniques to protect their businesses against the threat of unpaid accounts. As AWAN-EA facilitates access to risk-management services, we aid members by:

• Providing risk-management training—While foreign markets offer enormous opportunities for African exporters, they do not provide guarantees. Non-payment from a buyer can become an entrepreneur’s worst nightmare. AWAN-EA teaches members how to guard their firms against commercial and political risk of non-payment by insuring their foreign accounts receivable. Members can then use their accounts as collateral for loans.
• Linking members to risk-management service providers—AWAN-EA develops ties with
  established firms that can offer reasonably priced insurance to protect members from a wide range of risks associated with international trade, including: discriminatory imposition of taxes, levies and duties; government interference; damage to goods during delivery; war or civil disturbance; and embargo.