47705 October 2008 Voices of Women Entrepreneurs in Rwanda | A VOICES of Women Entrepreneurs in Rwanda About IFC’s Gender About the Chamber of Program: Women Entrepreneurs: IFC supports the participation of women The Chamber of Women Entrepreneurs is as well as men, as an important part of its one of nine chambers of the Rwanda Private mission to foster sustainable private sector Sector Federation. The mission of the growth in developing countries. Recognizing Chamber of Women Entrepreneurs is to that aspiring businesswomen are often foster women’s entrepreneurship through prevented from realizing their economic the promotion of training, creativity and com- potential because of gender inequality, IFC petitiveness at the national, regional is committed to creating opportunities for and international level. women in business. TABLE OF CONTENTS Abbreviations and Acronyms..........................................................................................................2 Acknowledgments ..........................................................................................................................3 IFC Foreword....................................................................................................................................4 Rwanda Chamber of Women Entrepreneurs of the Private Sector Federation Foreword . .......5 Executive Summary..........................................................................................................................6 Chapter 1: Women Entrepreneurs in Rwanda’s Economy.............................................................8 Chapter 2: Formalizing a Business and Dealing with Licenses and Taxation.............................13 ........................................................................................18 Chapter 3: Access to Land and Finance. Chapter 4: Increasing Women’s Access to International Markets...............................................24 Chapter 5: Moving Forward: Integrating Gender Concerns into Rwanda’s Investment Climate Reform..........................................................................................28 Endnotes.........................................................................................................................................30 References .....................................................................................................................................33 Abbreviations and ACRONYMS AGOA African Growth and Opportunity Act CAPMER Center for Support to Small and Medium Enterprises in Rwanda CIDA Canadian International Development Agency CSO Civil Society Organization DB Doing Business DHS Demographic and Health Survey DFID Department for International Development (UK) EICV Household Living Conditions Survey GDP Gross Domestic Product GEM Gender Entrepreneurship Markets FIAS Foreign Investment Advisory Service (World Bank/IFC) ICA Investment Climate Assessment ICT Information and Communication Technology IFC International Finance Corporation IMF International Monetary Fund LLC Limited Liability Company MDG Millennium Development Goal MIGEPROF Ministry of Gender and Family Promotion NGO Non-governmental Organization PC Personal Computer RIMS Rwandan Industrial and Mining Survey RIEPA Rwanda Investment and Export Promotion Agency RRA Rwanda Revenue Authority RwF Rwandan Franc SME Small and medium-sized enterprise UBPR Union des Banques Populaires du Rwanda UNDP United Nations Development Program UNICEF United Nations Children’s Fund US United States VAT Value-Added Tax Currency Equivalents (October 20, 2008) Currency Unit = Rwanda Franc (RwF) RwF 550.55 = US$1 Voices of Women Entrepreneurs in Rwanda | 3 ACKNOWLEDGMENTS This report was prepared by Jozefina Cutura, including Zouera Youssoufou, Natalie Africa, Consultant, IFC. It was prepared on the basis of Carmen Niethammer, Ignace Rusenga Ba- in-depth interviews with women entrepreneurs cyaha, Mark Blackden and Sevi Simavi. A par- in January 2008, who are profiled in this report, ticular debt of gratitude is owed to the women and desk research carried out in conjunction entrepreneurs who gave so generously their with a parallel gender review of legal and regula- valuable time to share their insights and expe- tory obstacles facing women in business. riences as women entrepreneurs in Rwanda, The author thanks the many individuals who and to highlight successes and challenges. have given valuable feedback on earlier drafts, 4 | Voices of Women Entrepreneurs in Rwanda IFC FOREWORD Africans are known to be resourceful and This report helps recognize the important creative when it comes to starting businesses role businesswomen play in the country’s that can alleviate poverty and lead to a better economy, shedding light on the challenges life. Women entrepreneurs in Rwanda are no they face. It also celebrates their successes and exception. This report considers the importance demonstrates the potential of business activity of entrepreneurship by women and its contri- for job and income generation. It is hoped bution to economic growth. The role of women that this important effort will help create a entrepreneurs is being increasingly recognized better understanding of the characteristics, around the world. Entrepreneurship provides contributions, and challenges that women opportunity while creating new jobs, which is entrepreneurs face. essential in a country with high unemployment This publication is a joint product of the rates, especially among women and youth. Rwanda Chamber of Women Entrepreneurs Rwanda is a world leader in promoting gender of the Private Sector Federation and IFC, equality, providing an encouraging example of which promotes women’s private sector how countries affected by conflicts can seize the participation through its Gender Entrepre- reform momentum in its aftermath to support neurship and Markets (GEM) Program. I the empowerment of women. Today more than applaud the efforts of the research team and half of Rwanda’s parliament is female—the first the entrepreneurs for sharing their experiences country in the world to have a female-dominated that create a report that encourages greater parliament—and the labor force participation awareness and understanding of business- rate of women approaches 80 percent. Women women in Rwanda. IFC is eager to support are viewed as key to the country’s recovery and the effort to focus attention on overcoming development following the genocide that ravaged issues and challenges facing Rwandan women the country more than a decade ago. in business. Jean Philippe Prosper Director Sub-Saharan Africa Department East & Southern Africa Hub Voices of Women Entrepreneurs in Rwanda | 5 Rwanda CHAMBER OF WOMEN ENTREPRENEURS OF THE PRIVATE SECTOR FEDERATION FOREWORD The 1994 genocide was a turning point for lights remaining challenges as more progress Rwanda and the voices of women began to re- needs to be made for women to become fully sound louder. In the aftermath of the tragedy, aware of the opportunities presented by the women constituted a high proportion of the legal reforms, have more access to finance, population. Impoverished and challenged to trade more across borders and develop skills in take charge of their destiny, they were called lucrative areas of business. upon to play a key role in reshaping the coun- The Government of Rwanda continues to try’s direction. lead initiatives that promote the status of In 2003, the New Constitution granted women in Rwanda and improve the way of women a minimum 30% representation in all doing business in Rwanda in general. This decision making organs of the state. This po- report recommends to stakeholders to devote litical milestone greatly benefited businesses. more efforts in upgrading the skills and The new constitution also granted women the economic opportunities for women entrepre- right to ownership and inheritance of land and neurs. property. Research shows that Rwanda fares The Rwanda Private Sector Federation has better than its neighboring East African states multiplied its efforts to play an advocacy in the number of women that own land and and capacity building role primarily for its property in their own names. membership and the Chamber of Women is Women have made great strides in terms of proud to lead and see more women entrepre- starting new businesses alone or in partnership neurs drive this change. The ultimate goal of often with people other than their spouses, the Chamber is to see women entrepreneurs and making progress towards formally register- contribute significantly to the economic ing their ventures. The number of women growth of Rwanda. IFC, through its Rwanda going into businesses is increasing. Rwandan Entrepreneurship Program (REDP) and women entrepreneurs are also entering non- Gender Entrepreneurship Markets Program traditional sectors such as ICT and dealerships (GEM), continue to play a supportive role and in petroleum products. the Chamber appreciates this collaboration towards the attainment of its objective. This report samples a few stories. It also high- Thérèse Bibonobono Director, Rwanda Chamber of Women Entrepreneurs Private Sector Federation 6 | Voices of Women Entrepreneurs in Rwanda EXECUTIVE SUMMARY Rwanda is recognized as a world leader in As the data in Figure 1.2 illustrate, the differ- promoting gender equality and offers an ence in monthly earnings between male and encouraging example of how post-conflict female proprietors is about 7,000 RwF (US$ countries can seize the reform momentum 12.75) in men’s favor. after conflict ends to support women’s Available data indicate that women’s empowerment. Radical reforms in the after- share of business ownership decreases math of the genocide have set the platform as the degree of formalization increases. for transforming women’s role in society. The While women own 58 percent of informal 2003 constitution outlaws discrimination enterprises, they own only 40 percent of based on gender. Reformed matrimonial, in- partially formal or formal enterprises. This heritance, and land laws have opened oppor- tunities for women’s economic independence. is a high figure in light of Rwanda’s past Today more than half of Rwanda’s parliament when married women needed the consent of their husbands to engage in business. is female and women’s labor force participa- Yet the fact that women’s share of busi- tion rates are a high 79.5 percent. ness ownership decreases as formalization Women entrepreneurs are a significant force increases suggests that they face particular in Rwanda’s private sector. Women head challenges with the process. 42 percent of enterprises. They comprise 58 Women entrepreneurs, especially success- percent of enterprises in the informal sector, which accounts for 30 percent of GDP. ful businesswomen, are increasingly able to purchase or inherit land, and secure bank The majority are engaged in the retail sector loans. Yet households headed by women have (82 percent), with the rest focusing on services smaller landholdings than men. Women are (16 to 17 percent) and manufacturing (1 also less likely than men to use land for their to 2 percent) sectors.1 Many women’s busi- enterprise development. When they do use nesses are successful and large, and Rwandan land, it is primarily land from the state, and women are increasingly branching out into financing still remains a major barrier for non-traditional sectors such as information women entrepreneurs. and communication technologies (ICTs) or Women in Rwanda perceive tax rates as dealing in fuel. a top business constraint. Both male and Yet inequalities persist. Men are moving out female entrepreneurs highlight taxation as a of agricultural employment at faster rates than severe obstacle, but research has found that women, and 86.3 percent of women continue a burdensome tax system disproportionately to be employed as agriculture and fisheries hurts small businesses and women in par- workers, compared to 71.2 percent of men.2 ticular.4 An informality survey found that Women are also under-represented in manage- Rwandan women were less likely to register rial positions. In manufacturing firms they their business for tax purposes - 22.3 percent occupy only 17 percent of management posi- of businesses represented by women declared tions.3 In addition, women’s businesses report their businesses compared to 27.6 percent of lower average earnings than men’s businesses. businesses represented by men.5 Voices of Women Entrepreneurs in Rwanda | 7 Women-owned businesses indicate the need successes and challenges highlighted by the for management and technical skills and women interviewed. While this report docu- better access to training facilities to grow ments barriers facing women in the private their businesses. New initiatives are start- sector, it also showcases Rwanda as a success ing to respond to this need. Expanding such story and in many respects a model for others training to a wider range of women would to follow. The stories of the businesswomen in help address their clear desire for greater skills Rwanda illustrate how women are overcoming development and training. the tragedy of genocide and becoming even stronger, as they create new hope and oppor- The report is informed by an in-depth legal tunities while rebuilding their society. and regulatory analysis, but also reflects the Chapter 1 WOMEN ENTREPRENEURS IN RWANDA’S ECONOMY R wanda is a world leader in promot- percent in the Supreme Court; and 40 percent ing gender equality. In just over a of provinces are governed by women.6 decade reforms in the political and This remarkable progress in the politi- legislative arena have placed women’s cal arena is paralleled by the success and empowerment at the forefront of govern- strength of women in business. Women’s ment’s priorities and granted women in labor force participation is significant, with Rwanda sweeping rights. In the aftermath participation rates at a high 79.5 percent, and of the genocide, they were seen as key to over 50 percent of the labor force.7 Rwandan women head 42 percent of all enterprises. They the country’s recovery and development. also comprise 58 percent of enterprises in the informal sector, which accounts for 30 percent Changes to matrimonial, inheritance, and of GDP, and they make a significant contribu- land laws have sought to give women the right tion to the country’s economy through their to inherit land. Unlike in many neighboring business activities, which are well distributed countries, the new laws override customary across sectors (Figure 1.1).8 This strong par- law, which often denied women property ticipation of women in the informal sector is rights. The constitution stipulates that women mirrored in other post-conflict countries, such should make up 30 percent of representatives as Liberia, where recent research found that not only in parliament, but in all decision- women entrepreneurs were much more likely making bodies. This has resulted in unprece- than men to own completely informal enter- dented representation of women at all levels of prises.9 The authorities nonetheless recognize government: 49 percent in the lower chamber that more progress is needed for women on the of parliament, 30 percent in the senate, 44 economic front. Voices of Women Entrepreneurs in Rwanda | 9 Women entrepreneurs are relatively young, Figure 1.1: Enterprise Distribution by and many turned to business in the years Sector and Gender following the genocide. In fact, of the small 45 enterprises operating in Rwanda, almost 70 40 percent were established within the last 10 Male 35 years.10 In contrast to their East African neigh- Female 30 bors, many businesswomen are sole owners or 25 Percent have partners in business that do not include 20 their husbands or families. In fact, interviews 15 with women entrepreneurs revealed a marked 10 absence of men in their businesses. 5 A 2002 study of women entrepreneurs found 0 Manufacturing Micro Residual Retail that the majority are engaged in the retail Source: World Bank, n.d. sector (82 percent), with the rest focusing on services (16 to 17 percent) and manufacturing (1 to 2 percent).11 Many of their businesses I decided to become an entrepreneur be- are successful and large, and as some of the cause there is not much employment here case studies in this report illustrate, Rwandan and salaries are low. I like to be free to plan women are increasingly branching out to non- and decide things on my own. traditional sectors such as Information and —Christina Rwayitare, Mode Savane Communications Technology (ICTs). Women’s entrepreneurship is thriving, but The government’s emphasis on coopera- inequalities in employment persist. Men tives has had a positive impact on women’s are moving out of agricultural employment at enterprise development. The government of faster rates than women, and 86.3 percent of Rwanda views cooperatives as important to women continue to be employed as agricul- the country’s development, and it designed ture and fisheries workers, compared to 71.2 a national policy to assist the movement in percent of men.12 Also, women are under-rep- 2004, which includes targets for strengthening resented in managerial positions. In manufac- women’s participation. As of 2004, there were turing firms, they occupy only 17 percent of about 300 cooperatives in Rwanda, which management positions.13 receive support from government, including business ideas, premises, training, and advice Women’s businesses report lower average earnings than males. As the data in Figure Figure 1.2: Monthly Earnings of Informal 1.2 illustrate, the difference in monthly earn- Proprietors, by Sex (RwF) ings between male and female proprietors is 40,000 about 7,000 RWF (US$ 12.75 equivalent) 30,000 in men’s favor (Figure 1.2). The difference RwF 20,000 in earnings is even more marked in the labor 10,000 37,906 30,391 force in general, with women workers receiv- 0 ing, on average, 22,239 RwF, compared to Men Women 42,956 RwF for men in weekly earnings.14 Monthly Earnings (RwF) Source: Republic of Rwanda. 2007a. 10 | Voices of Women Entrepreneurs in Rwanda Rwanda has made great progress in educating girls, but more is needed to ensure appropriate skills, especially at higher education levels and in business. The country attained MDG#2 in relation to parity in primary education, with gender par- ity rates of 100 percent. While at the second- ary level the enrolment rate used to be slightly in favour of girls, it is now slightly higher for boys (10.6 percent) than for girls (9.5 percent) (Table 1.1).16 Women in the labor force are relatively well on issues such as securing financing.15 This educated. They have, on average, 10.3 years government policy has helped create income of education compared to 9.2 years for men.17 for women, especially in rural areas, and Overall, Rwanda is on par with its neighbors women now comprise about 50 to 60 percent in promoting gender equality in education of cooperative members (Box 1.1). (Table 1.2).18 B o x 1 . 1 : G overnment is E ncouraging W omen ’ s I nvolvement in C ooperatives , B landine K amuyumbu , N gwino U rebe A ssociation B landine was running a savings scheme with a group of women in Byumba to encourage sav- ings and help curb domestic violence when the women decided to start a joint business. “We started thinking about forming a cooperative. I saw that maracuja (passion fruit) juice was expensive and was a good opportunity. We decided to start production.” The 36 women savings members formed their cooperative in 2001, which now has 45 members, including several men. According to Blandine, “we encourage men to join us in this enterprise as we want to work together.” The cooperative sells their maracuja juice in the region. “As we have a very good product, it has not been hard to find the market,” says Blandine. They buy the fresh fruit that grows in abundance in the area from the locals, thereby helping the local economy. Their model is illustrative of government support for cooperative development in Rwanda. “CAPMER helped us by teaching us how to make the juice. They also helped us produce a business plan. We have been really encouraged by the government,” says Blandine. Their factory used to be an abandoned government building, which the Ministry of Infrastructure gave them to use, free of charge. The cooperative has also received funding from the EU to rehabilitate their factory space, and funds from CIDA to buy machines for processing the juice. The quality of processing machines remains a persistent problem. “We went to an expo in 2005 and got an order from Kenya for 1,000 car- tons of juice, but since the machines did not work well we could not meet it.” Packaging is also a challenge. “Now we have plastic bottles that we bought from Indian suppliers, but it is hard to find good pack- aging.” The cooperative has ambitious plans for its future. It is looking to improve its product labeling and add nutritional information, strengthen product quality, and branch out to producing wine and jam. Voices of Women Entrepreneurs in Rwanda | 11 Women-owned businesses indicate that the Table 1.1: Net Secondary Enrolment Rate, by Gender and Location lack of management and technical skills and lack of access to training facilities are EICVi EICV2 obstacles to their business success. Few of Male Female All Male Female All the women interviewed for this study ben- City of Kigali 24.9 22.7 23.6  29.2 29.0 29.1 efited from any training programs. Though Other urban 7.4 11.3 9.3  12.6 14.9 13.8 nearly all expressed interest in training, as Rural 4.5 5.4 5.0  8.9 7.0 7.9 well as mentoring, and learning exchanges, National 6.2 7.5 6.9  10.6 9.5 10.0 indicating the need for such initiatives to fill Source: Republic of Rwanda. 2007b. existing gaps and enhance the skills of women in business. Their disproportionate burden inside the Table 1.2: Primary Attendance and Secondary Enrolment, home means that many women may have Eastern Africa. 2000–2005 less time to devote to their business. Women Primary School Net Attendance Secondary School Gross Country Ratio (2000–2005) Enrolment Rates (2000–2005) work, on average 49 hours per week, compared with 41 for men. While men spend more Male Female Male Female hours on economic work than women (35 Kenya 79 79 50 46 hours per week compared with 28 hours per Tanzania 71 75 6 5 week), women spend a larger share of their Uganda 87 87 18 14 time on domestic work (21 hours per week Rwanda 75 75 15 14 compared with 7 hours per week) (Figure 1.3). Source: UNICEF website. 2007. Some Rwandan women may start a business, rather than working for someone else, so as to manage more easily their responsibilities in the home. While precise data on the reasons for Rwandan women to enter business are lacking, Figure 1.3: Time Use of Men and Women data from the U.S., for example, indicate that Total Weekly Work Hours, by Sex ‘work and life balance’ were the primary moti- 60 Paid Work vating reason for women to start a business.19 Cleaning/Childcare Cooking 50 In addition to having less free time, busy Going to Market Fetching Water working women have to struggle with the lack Fetching Wood 40 of childcare options. In a survey in prepara- tion of the Draft Master Plan for Kigali, No. of Hours citizens were asked to rank their land use 30 and infrastructure needs in order of priority. “Child care facilities” was voted as the second 20 highest priority. Addressing this issue might help ease women’s work burdens and might 10 therefore help facilitate women’s business suc- cess (Box 1.2). 0 Male Female Sex Source: Republic of Rwanda. 2007b. 12 | Voices of Women Entrepreneurs in Rwanda B o x 1 . 2 : U murerwa ( F yfy ) K imen j i , A fri . C om In 1989 Fyfy was a young woman living on the border between the Democratic Republic of Congo and Rwanda when she entered the world of business. “I started with importing items from Dubai and sell- ing them in the Congo as I live close to the border. In 1995 I opened a gas station. This is how I got into the world of petrol. We import petrol from Kenya and transport fuel.” She has not stopped there. Fyfy also built a transport society and opened a jewelry boutique in Kinshasa. To finance her success, Fyfy always relied on her own funds rather than bank loans, and has closely involved her husband and family members. Working in a highly unusual area for a woman, Fyfy always wanted to be self-employed. “I detest working for someone else. As a woman you have limited time, and not all doors are open. I always counsel other women to start their own private business.” Fyfy says that running her business has been challenging, but has allowed her the flexibility to raise a family. She delegates work, which allows her more time with her two children. “It is tiring to have been in business for so long,” she says. Going forward, with another child on the way, Fyfy is hoping to rest and devote more time to family. Chapter 2 FORMALIZING A BUSINESS AND DEALING WITH LICENSES AND TAXATION T hough formalizing a business can lead to many benefits for an entrepreneur, women’s businesses in Rwanda are less Lack of relevant information and low levels likely to be registered than men’s. of post-primary education among women are associated with greater informality. In Rwanda only 0.3 percent of businesses For established women’s businesses in Kigali are registered as limited liability companies business registration does not appear difficult, (LLCs), and 39 percent are under individual but it is a bigger problem for women who ownership (Table 2.1). Even though few busi- lack relevant information, particularly in more nesses - either male or female – are registered, remote areas of the country. An informal- available data indicates that women’s share ity survey conducted by FIAS found that 22 of business ownership decreases as the degree percent of women in formal or partially for- of formalization increases. While women own 58 percent of informal enterprises, they Table 2.1: Legal Status of the Private Sector own only 40 percent of partially formal or in Rwanda formal enterprises. This is a great accomplish- Percent ment in light of Rwanda’s past when married Groups and associations 42 women needed the consent of their husbands Individual ownership 39 to engage in business activities. Yet the fact Cooperatives 12 that women’s share of business ownership Family ownership 0.4 decreases as formalization increases suggests Limited liability companies 0.3 that they may face particular challenges with Source: World Bank. 2004. this process. 14 | Voices of Women Entrepreneurs in Rwanda mal enterprises had post-primary education, requirements on all corporate entities and compared to 12 percent in informal enterpris- individuals engaged in business. It removes es.20 The FIAS survey also found that freely the current requirement to register with the available and helpful information was the Courts, and confers a right to engage in most important factor in firms formalizing. business for those who are registered. Campaigns targeted at women on the benefits • The new Cooperative Act and the Coopera- of business registration may prove helpful in tive Agency Act set up a streamlined regime increasing formalization among women. for cooperative governance and regulation. Business registration was not a problem. These reforms are important in facilitating I used a lawyer and the process took a women’s business registration. Additional steps couple of weeks. RIEPA has a one-stop- to address gender concerns include: shop [for this purpose]. • Appropriate opening hours for the new —Janet Nkubana, Gahaya Links registry that enables women to attend. The small size of women’s enterprises may • Provide female staff to create confidence also be a reason why women’s businesses among women users. are less likely to register. Many women run micro or small enterprises, and may enjoy • Target outreach programs for women with running the business from home to more eas- information on why and how to register. ily combine work with their domestic respon- • Balance registration cost recovery consider- sibilities. Given women’s longer work hours, ations with the desire to encourage registra- the time it takes to register a business may be tion by cash-constrained women. an additional deterrent to formalizing their enterprises. Tax implications of registering, Rwanda is also embarking on licensing further discussed below, are also a deterrent simplification, a process which women are for many women. likely to benefit from. Rwanda is ranked at 90 in Doing Business 2009 in the dealing Rwanda’s government is committed to sim- with construction permits indicator of the plifying business formalization. The govern- Doing Business report, a substantial improve- ment’s focus is on simplifying documentation ment (+35) over the previous year. Still, and procedures to reduce the time and cost of obtaining a construction permit remains a business registration. Reforms include: lengthy process, and women’s businesses inter- • A new Companies Act, which simplifies viewed for this study note numerous lengthy the registration procedure for companies. procedures and delays in getting construction permits (Box 2.1). • Rwanda Commercial Registration Services Agency: The reformed system for company To simplify procedures further, IFC’s Invest- registration enables a single registration and ment Climate Reform Project is conducting a issue of a certificate of incorporation. comprehensive inventory of business licenses, with the aim to abolish unnecessary or unduly • The Business Registration Act imposes onerous ones. Initial research suggests that compulsory decentralized registration there are about 200 business license require- Voices of Women Entrepreneurs in Rwanda | 15 B o x 2 . 1 : I mmaculee K alisa , R wanda N etwork C omputer I mmaculee Kalisa was living in Paris and looking for business opportunities that would contribute to employment and development in her native Rwanda when the idea for a computer company occurred to her. With ICT being a major government objective in Rwanda’s Vision 2020 strategy, Im- maculee returned to Rwanda to contribute to her country’s development. Her company is proof that women are breaking out of traditionally female sectors, and has the ambitious goal of “providing each Rwandan citizen with ICT tools and enabling them to acquire necessary related skills at a low cost.” Rwanda Computer Network provides computer assembly, computer parts sales, development of com- puter programs, network installation and configuration, and offers various courses on IT. Its main product is Gorilla 1000, a computer named after one of Rwanda’s proudest trademarks. Though the company started operations only five years ago, it has already built an impressive set of facilities on a large company campus, with assembly, storage and training rooms for computer courses that the company offers. Immaculee’s clients include government ministries and large banks. Following an order from the Ministry of Education to supply 4,000 computers to secondary schools, Gorilla 1000 can now be found in schools throughout Rwanda. Yet it took her one year to get the construction permit to build the facilities. “Each time we went and followed up {with the relevant authorities}, they told us there were more procedures and rules.” Another big challenge for Immaculee was “to convince the people of Rwanda that Gorilla 1000 functions like any other computer.” Because the computers are manufactured locally, she is able to sell them more cheaply than her competition. This has enabled her to attract customers. Marketing has also been a challenge, though the company has sponsored radio shows and advertisements to convince skeptical minds. Immaculee has ambitious plans for her company. She wants to focus on energy saving projects and is working on a mini PC, which takes up less space and consumes less energy than traditional computers. ments in Rwanda, of which 20 have been their businesses compared to 27.6 percent of identified for immediate review. Sex-disag- businesses represented by men. The survey gregating the data in the project’s monitoring also found that, when asked to choose the and evaluation framework will help better most important reason for becoming partially understand the differential impact that certain formal, enterprises pointed to the realization licensing requirements may have on women’s that taxes were not actually as high as they businesses as well as the impact of potential thought and that administration was fair. An reforms on women and men (Box 2.2). attempt to avoid the tax burden might there- fore be a big reason why women’s businesses Female entrepreneurs in Rwanda perceive are more likely to be in the informal sector. tax rates as a top business constraint. Though Rwanda is ranked at the high number 56 in the Tax policy in Rwanda is undergoing Paying Taxes indicator of the Doing Business changes. The country has implemented a new 2009 report, both male and female entrepre- tax code for direct taxation and a new invest- neurs highlight taxation as a severe obstacle ment promotion code. A new schedule for (Figure 2.1). Research has found that a burden- investments under the customs legislation had some tax system disproportionately hurts small also been drafted.22 An electronic filing project businesses and women in particular.21 is underway, with the pilot program focusing on large tax payers. The FIAS informality survey found that women in Rwanda were less likely to register Moreover, the government is recognizing their business for tax purposes - 22.3 percent the particular challenges that women face in of businesses represented by women declared meeting tax obligations and is proactive about 16 | Voices of Women Entrepreneurs in Rwanda B o x 2 . 2 : S ylvie M ukamusoni , B ambino S uper C ity A dynamic woman with a passion for children and gender issues, Sylvie was an active member of the Chamber of Women Entrepreneurs in Rwanda when she developed the idea for her business. She wanted to build a play destination for children, and initiated construction at a site on the outskirts of Kigali in 2002. Seven other women joined her as partners, turning the business into an association in which she holds the majority stake. Bambino Super City is today a family destination, with a variety of activities for both children and adults. The business fills a gap in the city, and customers flocked to the site with their eager children soon after the site was opened. The site caters to local NGOs, govern- ment, and other institutions that need conference space. Marriage ceremonies have also taken place at the grounds. To start operations Sylvie had to get a number of licenses, and the process associated with these has significantly hampered her business success. Given the lack of suit- able equipment in the region, Sylvie had to import the bright-colored rides such as carousels from China. The equipment was imported at great expense, funded through a loan from a local bank. The business also needed the authoriza- tion from the Rwandan Bureau of Standards, which was received following a visit of government authorities to her site in 2005. As soon as the site was opened, business surged, as families from across the region flocked to the park grounds. However, only two months later the amusement park was abruptly shut down. Sylvie was informed that her permit was not valid as the Bureau had not brought to the inspection a qualified engineer. Unfortunately, no such engi- neer could be found in the country. It took two years for the government to finally fly one to Rwanda from Germany. Sylvie is optimistic that she will now finally receive her license, and despite the delays is grateful for the government efforts to secure the engineer at last. Amidst all the delays, Sylvie was still saddled with bank debt, and needed to continue paying off her bank loan at high interest rates. Yet with the children’s section of Bambino City closed, the number of visitors and revenues dropped dramatically. Still, Sylvie remains hopeful that she will receive the needed permit, and is looking forward to entertaining again large numbers of visitors. Figure 2.1: Ranking of Business Constraints by Gender 60 Male 50 Female 40 30 20 10 0 ns y t nd te nd n e m ns rs g e y ty n e or cit ilit ad nc im tio in io ke i Ra te tio io l La p i ns pt tri om tab ab a Tr Cr ra ys at or ns Fin ica x rru ice ec to ist tS st ul W Ta a ns un Tr In El eg in sL Co ss to ur sa lI d m ce ic m ille rR Co ca es ss om Ad om Ac sin ce i Sk bo lit st on Ac Po ec x Bu La Cu Ta ec l Te ro ac M Source: World Bank. n.d. Voices of Women Entrepreneurs in Rwanda | 17 addressing the issue. In an effort to reach out to businesswomen, the Rwanda Revenue Au- B o x 2 . 3 : C onfusion about T a x R ates thority has gathered views of women entrepre- P ersists in the T ourism S ector , Jac q ui S ebageni , T housand H ills neurs on paying taxes and suggestions on how E x peditions best to improve their services.23 The Rwanda Revenue Authority (RRA) “ W e are a young company in a young indus- try. I started the business in 2005,” says Jacqui Sebageni, the owner of Thousand Hills Expedi- has evaluated our performance and we tions, a tour operator based in Kigali. The are getting a special clearance through a company offers a comprehensive package of services to tourists in Rwanda, from hotel ac- facilitation program to boost exports. RRA commodations and transport, to guides and permits to visit the country’s national parks. officials have come here to teach us how Jacqui was determined to have her own to benefit from their programs. business as soon she returned to Rwanda —Janet Nkubana, Gahaya Links from Canada, and she wanted to combine her experience abroad in tourism with her passion for her country’s landscape. “We have so much to offer. Yet in particular industries there remains a Nature and scenery have made Rwanda an easy sell for us. I significant amount of confusion as to the am in a fortunate position to be doing what I am passionate about.” According to Jacqui, the small size of the country is an advantage for tour operators, as appropriate tax rates and available conces- many of the destinations are easily accessible. Demand seems high too. Jacqui sions. Tourism, which is an increasing source doubled her tourist figures between 2005 and 2006. She now has 10 employ- ees and an office located at the Hotel des Mille Collines. While Jacqui has been of income for women in handicrafts, retail placing ads and networking through the tourism industry, she also gets a lot of and related service sectors, is a good example walk-in business from the hotel. of this issue. Tourism businesses benefit from The biggest issue facing her business are the unclear regulations on taxation of zero customs and excise duties on imports of the tourism sector. “It’s not very clear what you are getting taxed for,” she says. tour operator vehicles, hotel shuttles and other “As a tour operator, which part of tax should we pay? For example, it’s obvious we have to pay VAT, but the details are not obvious.” Since many of the other specialized vehicles. Entrepreneurs working in tour operators are facing similar confusion, the association did some ground the sector are supposed to benefit from VAT work and contacted the Rwanda Revenue Authority. “We went through an association but I do not think the matter has been solved yet,” says Jacqui. To concessions and reductions, but the reality can remedy the problem, she suggests producing clearer taxation guidelines targeted be different. The large degree of confusion to specific sectors. among businesspeople surrounding the sys- tem, despite tax education campaigns, means that many businesses many not be taking advantage of this (Box 2.3 and Box 2.4).24 B o x 2 . 4 : C ecile R usangamihigo , I mprimerie S elect G raph C ecile had a friend who worked for a printing company when she got the idea to establish one herself. “With our small means we bought a printing machine in Europe,” Cecile says about her company’s beginnings. Started in 1995, she and her husband now employ 40 people and own a large factory in Kigali. “We need a lot of space for our machines,” she says. “This is why we have such a big factory.” Since working with machines demands strength and force, the majority of Cecile’s employees are men. As the leading printing firm in the country, Imprimerie Select Graph clients include government ministries, NGOs, and the private sector. When the firm was first established, there were not many other players in the field of printing. But, according to Cecile, competition has increased, and she has hired a marketing agent who works on securing new clients. While she has been able to receive financing from a bank, she notes that high interest rates and the guarantee requirements are a burden. To get their bank loan, she and her husband provided their house as collateral. Yet, taxes are an even bigger problem for her. “The tax rate is too high and procedures are too difficult,” she says. Cecile’s vision for her company is to expand further, and increase her product offering. She would welcome learning exchanges with other countries to find out how the printing business is done elsewhere, as well as ideas on business development in an increasingly competitive marketplace. Chapter 3 ACCESS TO LAND AND FINANCE I ncreasing Women’s Access to Land in which lays out the framework for land rela- Rwanda - A Success Story, with Some tions and stipulates that women and men have Challenges equal rights to land. Rwanda has made great strides in granting How did these substantial reforms come women land ownership. Prior to the late about? Following the genocide, women in 1990s, women could not inherit land, and Rwanda made up 70 percent of households. ownership was transferred from father to son. They found themselves as heads of families Women had no rights to their husband’s land and were the main income earners in soci- on divorce and had merely guardianship rights ety. These reforms were therefore a priority over their sons’ land. A childless widow could considering the need to reconstruct Rwanda’s only claim user rights on her husband’s land if economy and ensure livelihoods. she married one of his brothers. While women This recognition was coupled with a dramatic could gain access to land from their fathers, increase in women’s political participation, and only their sons could inherit it. powerful female advocates backed women’s In a remarkable break with the past Rwanda issues in parliament. The Forum of Rwandan changed its matrimonial and succession Women Parliamentarians, which promotes law in 1999, giving women property rights, gender equality and reviews discriminatory including the right to inherit land from their legislation, was a powerful ally, as was a strong parents. The new Inheritance and Marital women’s movement that could lobby and Property Law enshrines the principle of non- advocate on the issue. The Constitutional discrimination and overrides customs that requirement for women to hold at least 30 exclude women from land ownership. Rwanda percent of decision-making posts means that adopted the Organic Land Law in 2005, women are represented on bodies that make Voices of Women Entrepreneurs in Rwanda | 19 Table 3.1: Landholdings by Size and Sex of Household Head (2000/01) EICV 1 Data Rural Group 1 (hh Rural Group 2 (hh Rural Group 3 (hh landholding below landholding between landholding 0.3 ha) 0.3 ha and 1 ha) above 1 ha) Urban FHH MHH FHH MHH FHH MHH FHH MHH Number of households 206,475 383,084 153,639 321,737 112,048 274,065 14,177 32,214 % of households out of the total headed by that sex 42% 38% 32% 32% 23% 27% 3% 3% % of households out of the total in that group 35% 65% 32% 68% 29% 71% 31% 69% Source: Daley 2008. decisions on land administration and alloca- unions,’ and the need for continued educa- tion through the National, City of Kigali and tion on women’s new rights.25 The newly District land commissions, and sector and cell initiated Rwanda Women’s Network project land committees. on increasing awareness about women’s land rights should help in this goal. Rwanda has Table 3.1 above indicates that, while women’s made substantial progress in 2008-09 on the land ownership is not comparable to men’s, Registering Property Doing Business indica- their landholdings are substantial, especially in tor, moving from a ranking of 138 in 2008 to comparison to neighboring countries such as a ranking of 60 in 2009 (Table 3.2), largely by Kenya or Uganda, where women own far less substantially reducing registration costs. This land in their own name. This positive story does not explicitly address the extent to which indicates the importance of women’s political women, as distinct from men, find it easier participation in ensuring equality for women in legislation. These are powerful changes, but imple- Figure 3.1: Land Use by Gender mentation challenges remain, particularly 100 in rural areas where customary traditions 90 80 prevail. Women entrepreneurs, especially suc- 70 cessful businesswomen, are able to purchase 60 Percent or inherit land under their own name and 50 use this asset for securing bank loans. Yet 40 30 households headed by women have smaller 20 landholdings than men. Women are also less 10 likely than men to use land for their enterprise 0 e y nd s al A nd er l ta development. When they do use land, it is ht el at /N rib th To la la at ig st DK O st riv tr n e m us w ht sp ou ro O primarily land from the state (see Figure 3.1). rig ot sf ith ht sn ht rig e w us rig e e Do e e/ Us us e as us e/ Le as e/ Moreover, the new laws that grant women as Le Le Male Female land rights apply to legally registered mar- riages, which are uncommon, indicating the Source: Government of Rwanda and FIAS. 2006. DK/NA = Don’t know or not available. need for the law to expand to ‘consensual 20 | Voices of Women Entrepreneurs in Rwanda Table 3.2: Registering Property Doing Business Doing Business Registering Property Data 2008 2009 Rank 138 60 Number of Procedures 5 4 Time to Register Property (days) 371 315 Cost to register property (as % of property value) 9.4% 0.6% Source: World Bank 2008. Note: Rankings have been adjusted from the 2008 report to take account of: (i) changes in the methodology; and (ii) the addition of three new countries to bring the total to 181. to register property, but this is nonetheless a Over 30 percent of households have accounts welcome development (Box 3.1). with financial institutions, which compares favorable to other countries with similar Access to Finance is a Top Barrier for Women levels of development.26 Yet, of all Rwandans Both women and men cite access to finance who access credit, 72.8 percent access it from as a top constraint. Rwanda has 6 commer- informal and only 27.2 percent from formal cial banks and 200 microfinance institutions. sources.27 Informal sector firms, where the B o x 3 . 1 : S ymphrose M ukamazimpaka , H otel L e P etit P rince A s a young girl, Symphrose loved reading the book Le Petit Prince. After her husband died in the genocide, she read the book to her children, as a symbol of hope. To Symphrose, the hero portrayed in the book “was a young man full of spirit, just like my husband.” Years later, when she was considering a name for her newly built hotel in Butare, the name Le Petit Prince seemed like an obvious choice and a remembrance to her husband. The hotel was formally opened in early 2007, with a large statue of a “Petit Prince” greeting visitors at the entrance. Even prior to the war, Symphrose was an entrepreneur, running a hardware store together with her husband. She fled to Burundi during the war with her four children. When she returned to Rwanda she was a widow, and her hardware business was destroyed. Yet she was deter- mined to work hard and rebuild her life. She reopened the hardware store and start- ed a trucking business, transporting a variety of goods in the region. The idea of building a hotel occurred to her soon later. “I realized that in Butare there are few hotels and they are of poor quality,” she says. Her newly built property has 25 rooms, a restaurant, a bar, seminar facilities and a large, meticulously groomed garden. Her clients are NGOs, universities and government institutions which often hold seminars at her premises. She once even hosted Rwanda’s President, Mr. Paul Kagame, and his wife during their visit to the region. Symphrose started the hotel with her own funds. She asked for funding from the Bank of Kigali but was initially denied. “I was told the project was not vi- able,” she says. When the bank director changed, she got the financing. She used her own house as a guarantee for the bank as well as the initial building that she had constructed with her savings. The fact that some of her clients take a long time to pay creates burdens. According to Symphrose, “state institutions do not pay in a timely manner, which creates cash flow problems. They usually take about a month to settle a bill.” Symphrose is interested in exchange visits with other countries, to learn more about the hotel industry and practices. She would like to further expand the hotel premises, build a swimming pool and a VIP area for special guests. Voices of Women Entrepreneurs in Rwanda | 21 Figure 3.2: Constraints to Business Operation and Growth 100 Partially formal 90 Informal 80 70 60 Percent 50 40 30 20 10 0 g n nd y g s r y t st y rs n n m e os ise ilit lit lic cin tio cin tio tio co ke rd te la bi sc po ab em rta p la ys so y- or an an ila to ru om gu st ct ls w di ry pr fin po Fin va r in tri ss ga Co re to e t, ec sa ns to ce ec bl to ic ef of la Le c l a m Te la Ac ifi om El ss th gu ss Tr st ai no ec ce ce Co Re e, av ec sp Ac co im Ac l Te of e or Cr ro ills ct ac Se Sk M Source: Government of Rwanda & FIAS. 2006. majority of women’s businesses are, cite access women in Rwanda are more likely to own to finance as the biggest obstacle to business property than in some of the neighbor- operation and growth (Figure 3.2).28 ing countries, some women entrepreneurs are able to provide the collateral needed for Banks are still very old fashioned. The bank loans. Also, many new businesses are established by women who lived abroad for whole banking system in Rwanda is really a period of time and came back with enough old. But banks have started to change over initial capital for their business start-up. Even the last few years. Initially it was hard to without land as security, women cooperative be even listened to, but now it’s a whole members can borrow from UBPR, which pro- lot easier. vides loans to cooperatives without requiring —Jacqui Sebageni, Thousand Hills Expeditions collateral (Table 3.3) (Box 3.2). Highlighting the problem, Rwanda ranks a low 145 out of 181 under the World Bank’s Table 3.3: Breakdown of Credits provided by Doing Business indicator for Getting Credit UBPR, end 2003 (%) in the 2009 Doing Business Report. Detailed Agriculture 11.3 and sex-disaggregated data on women’s access Wage earners other than teachers 34.5 to finance is lacking, but a planned FinScope Traders 21.9 Survey on the usage of financial services in Teachers 12.6 Rwanda is expected to shed more light on the Handicrafts 7.4 subject and help devise appropriate measures. Cooperatives and firms 4.7 New matrimonial, inheritance and land Public sector 7.6 laws have paved the way for increasing Source: Samen 2005. women’s access to finance. In fact, since 22 | Voices of Women Entrepreneurs in Rwanda interest rate on loans was 17 percent, and the B o x 3 . 2 : B erthilde N iyibaho average term of the loan was 36 months.29 and G ertrude M ukantabama , Bank errors and delays in processing payments B N P roducers were highlighted by the cooperative groups B erthilde was growing mushrooms at her home to contribute to her family’s income, and decided to scale up her efforts after rave interviewed for this study. reviews and increasing demand from her neighbors. In just one year, We are told that a lot of financing is avail- she managed to set up an association of women mushroom produc- ers in five regions surrounding Kabuye. The company was founded in able, but I do not seem to know how to December 2006, but it already employs 30 workers and sells its dried mushrooms to large clients such as the Novotel Hotel, Hotel de Mille access it. It took me three years to finally Collines, and Union Trade Centre (UTC). The groups produce about get financing. Even now that I have a 30kg of mushrooms per day. loan, the interest rates are prohibitive. With the mushroom cultivation process requiring a set of com- plicated processes, BN Producers had to build a large production —Symphrose Mukamazimpaka, Hotel Le Petit Prince facility. Berthilde received a loan in the amount of 1,800,000 from the Banque Populaire and used the funds to construct new produc- To help increase women’s access to finance, the tion and storage facilities. According to Berthilde, “our project was good, so it was not hard to get the Ministry of Gender and Women in Develop- financing.” Yet financing still remains a key ment, in collaboration with the Commercial issue for the organization. “Women {in Rwanda} need more financing. Without Bank of Rwanda, established a Women’s financing women can’t advance. It’s Guarantee Fund in 1998. However, the ini- very difficult, and the repayment terms are onerous.” tiative has suffered from weak implemen- tation and only 17 loans have been made Training on mushroom cultivation from the Ministry of Agriculture under this scheme since its inception. helped BN Producers understand the basics of the growing process. Non-land asset based lending and leas- However, Berthilde and her staff hope for more training. Their marketing ef- ing could help expand women’s access forts, for example, have been quite limited to finance. The government is enacting a to date and need improvement. With the new law and putting into place a regime to assistance of CAPMER, BN Producers took part in an expo, which helped them attract many clients. Yet the simplify the law and practice on non-land mushrooms are still sold in basic plastic containers, without any tags asset based lending. It will enable all possible or nutritional information, an issue that the group is aware they need to address. The association is now also researching new production moveable assets to be used as collateral, which methods and looking to expand both production and sales. would particularly benefit women since they use less land in their enterprises. Even established businesswomen struggle Leasing is another tool that could increase with getting larger bank loans for business women’s access to finance. While it is cur- expansion and complain of the high cost rently underdeveloped in Rwanda, the of finance. The 2005 Rwanda Industrial and government is eager to support it and IFC Mining Survey showed that 54 percent of has initiated a multi-year program to develop firms identify the cost of finance as a con- leasing (Box 3.3). Draft leasing legislation has straint to business. In particular, high interest been prepared, and the Rwanda Revenue Au- rates are a persistent complaint among women thority is reviewing the appropriate tax regime entrepreneurs. In 2004, the average annual to comply with best practice. Voices of Women Entrepreneurs in Rwanda | 23 B o x 3 . 3 : I F C S upports L easing in R wanda IFC’s Rwanda Competitiveness and Enterprise Development Project, Leasing Development Program was launched in 2007 to create new financing opportunities for businesses by promoting leasing as an alternative financing mechanism. Program components include: • Legislative Review: enhancing the legislative, tax and accounting environment for leasing. • Capacity Building: providing training sessions for lessors, lessees, government officials and other stakeholders in the leasing industry. • Business Development: creating opportunities for new local and foreign investment in leasing. • Public Education and Support to Rwanda Leasing Association. For more information, visit: http://www.ifc.org/ifcext/rwandaleasing.nsf/Content/home Chapter 4 INCREASING WOMEN’S ACCESS TO INTERNATIONAL MARKETS I ncreased exports have a high potential of Rwandan women has helped capture the to create employment and income for minds and wallets of international consum- women ers. In Rwanda there are about 500,000 coffee farmers, usually organized into cooperatives, Rwanda is experiencing strong trade perfor- 20 percent of whom are widows since the mance, and exports have been growing at an genocide. The revitalization of the coffee average of 12.5 percent per year since 2001.30 industry and the government’s focus on pre- Exports reached about US$152 million in mium coffee is paying off for the country as a 2006, dominated by coffee, tourism, and whole, but also for women small-scale farmers. tea. ICT, horticulture and handicrafts, which With exports increasing, incomes have more create significant employment for women, are than doubled and a pound of coffee sells for identified as main drivers of diversification.31 as much as $3.50. One highly visible buyer of The government estimates that tourism will Rwanda’s coffee has been the global gourmet grow at an annual compounded rate of 40 per- coffee chain, Starbucks, which has targeted cent and will create 280,000 jobs by 2012.32 women in particular and committed to grow- This growth could have significant positive ing and supporting women coffee traders effects for both women as employees in associ- through training and technical assistance.33 ated industries as well as women entrepreneurs providing tourism-related services. My biggest challenge is to have a market. Women’s contributions to Rwanda’s exports When I have a market I will be able to are garnering international attention and teach and employ more women. increasing women’s incomes. Coffee growing —Christina Rwayitare, Mode Savane and handicrafts are examples of how the story Voices of Women Entrepreneurs in Rwanda | 25 Rwandan handicrafts have also captured Table 4.1: Trading Across Borders in Rwanda international attention, causing a surge in Trading Across Borders Data Doing Business 2008 Doing Business 2009 incomes for women. Following a major order Rank 170 168 by U.S. department store Macy’s, within just Documents for export (number) 9 9 a few years thousands of women have become Time for export (days) 47 42 employed in making traditional peace baskets for sale abroad and to tourists. The additional Cost to export (US$ per container) 2975 3,275 income has helped improve children’s educa- Documents for import (number) 9 10 tion and nutrition, provide access to clean Time for import (days) 69 42 water and assist with reconciliation efforts.34 Cost to import (US$ per container) 4970 5,070 Yet trading across borders remains difficult Source: World Bank 2008. Note: Rankings have been adjusted from the 2008 report to take account of: (i) changes in the methodology; and (ii) the addition of three new countries to bring the total to 181. in Rwanda. The country is ranked at number 168 in the Trading across Borders indicator of ultimately help reduce the time and costs for the 2009 Doing Business report. Operating import and export transactions (Box 4.2). in a landlocked country, Rwandan producers Women Exporting – the Example of incur huge trade logistics costs for exports and Rwanda’s Peace Baskets imports. The process for an exporter takes, on average, 42 days, and costs US$3,275 per Rwanda’s century-old basket weaving tradi- container (Table 4.1). Some of these costs and tion has been dominated by women who pass delays are explained by poor infrastructure, on the skill from mothers to daughters. Since but about 60 percent of the time is due to 2005 basket weaving has garnered significant procedural delays caused by assembling and international attention when media started to processing trade documents, customs clearance capture the story of the women weavers and and technical control agencies’ regulations.35 caused a surge in demand. The booming tour- ism sector in Rwanda has helped further spur Rwanda’s government has made a number demand for the baskets, which are one of the of improvements to facilitate imports and country’s trademarks and are widely available exports. In 2005 Rwanda restructured the at local gift shops as souvenirs. Rwanda’s crafts Rwanda Investment and Export Promotion and garments are eligible for duty-free entry Agency (RIEPA). While this year’s Doing into the U.S. market under AGOA, and by Business ranking reflects a poor performance, 2005 three companies –Modis International, there have been reforms since the previous year, when the process required 14 docu- B o x 4 . 1 : T rade L ogistics ments, lasted 60 days and cost US$3,840. T Improvements in the trade logistics regime have reduced border clearance times, improv- he trade logistics component of the IFC investment climate reform program ing Rwanda’s Trading across Borders ranking focuses on: by twelve points. • Simplification and harmonization of documentation procedures. In 2007 IFC initiated a comprehensive pro- • Technical support to improve efficiency in customs and technical clearance. gram of activities to simplify trade logistics, • Pro-active encouragement of investment in key tradable sectors. and a number of positive reforms have been • Capacity building on risk-based management practices for inspections. already carried out (Box 4.1), which should 26 | Voices of Women Entrepreneurs in Rwanda B o x 4 . 2 : C ost of T ransport is H igh , Jeanne M utakwayire , N e j a C osmetic S s tocked with internationally recognized beauty products, such as facial creams from L’Oreal and Bioderma, Neja Cosmetics is a go-to destination for beauty needs in Kigali. “There was a need for such a cosmetics store,” says Jeanne. “There are not many others like this that are specialized {in Kigali}. She opened the store in 1995, after running a hair salon for 6 years and working as an accountant. Neja Cosmetics has done well, and employs 20 workers in its three branches in Kigali. While most of Jeanne’s clients are well off, she has introduced more affordable products such as the 500 RWF lip gloss that is affordable to a wider range of clients. The biggest challenge facing Jeanne’s business is the high cost of transporting her prod- ucts from international markets to Rwanda. She imports her products mainly from Eu- rope and Dubai and obtained an import/export license to do so. “{The process} now takes about two days, and is not costly,” says Jeanne. “But it used to be difficult. Women used to not be allowed to get a license without their husband’s permis- sion until 1995.” Ideally, for cost saving and volume reasons, she ships her goods via containers. But this takes a lot of time. “If I ship goods via a container, it takes three months for them to reach me here.” According to Jeanne, shipping by air is faster, but much more expensive.” Jeanne is a founding member of the Women’s Chamber, and was its president from 1995 until 2001. Her future plans include expanding her shops into other parts of Rwanda, and specializing to offer professional beauty advice to clients. Gahaya Links, and AVEGA Gahoza - had cooperatives, challenges remain. Continued taken advantage of this opportunity to export lack of technical know-how and quality con- to the Macy’s department store.36 trol means that many of the budding basket- weaving cooperatives are struggling to make Recognizing the potential of the product, a product that will meet international buyer the government has initiated a program of requirements. Poor marketing and over-satu- support to the sector. The government has ration of the product are also issues that limit established handicrafts centers and organized the market size. While some companies such women into cooperatives, while providing as Gahaya Links have found a long-standing training to help improve their skills. One buyer in the Macy’s department store (Box highly visible program, supported by the First 4.3), others are struggling, and having to Lady, Mrs. Jeannette Kagame and the Mayor rely on one-off orders. Moreover, lengthy of Kigali, has been the Agaseke Promotion export procedures in Rwanda mean that Program, which has employed over 3,000 international orders have to be planned well impoverished women. in advance, and the high cost of transporting While the government is addressing the lack the goods can add significant mark-up costs of organization in the sector by supporting to the product. Voices of Women Entrepreneurs in Rwanda | 27 B o x 4 . 3 : Janet N kubana , G ahaya L inks J anet Nkubana and her sister Joy Ndungutse have turned Rwanda’s long basket weav- ing tradition into a profitable business that employs about 3,000 women from across Rwanda and that generated $300,000 in sales in 2007. Sold by Macy’s and pro- moted by U.S. media personality Oprah, Rwanda’s delicately woven peace baskets are finding their way into American homes and hearts. This extraordinary success was marked by difficult beginnings. The sisters regis- tered their business in 2004, and started by selling the baskets at American flea markets and to tourists visiting Rwanda. But Janet soon seized opportunities and linked up with organizations such as USAID and the World Bank. While participat- ing at a New York sources trade show with USAID sponsorship, Janet made links with Fair Winds Trading Inc, which eventually became their U.S. partner and helped secure the contract with Macy’s. Winning a World Bank business plan competition helped secure start-up funds. While Gahaya Links had trouble meeting client demand, it has built its capacity over time. A big challenge for Janet has been “organizing the women and getting the required quality from them.” Janet has worked with the government to organize the women weavers into cooperatives, and Gahaya Links provides extensive training to help ensure quality. Gahaya Links demonstrates how an export-based business can successfully overcome challenges to trading across borders in a landlocked country. Janet has not found the paperwork associated with exporting to be burdensome. She usually manages to get the needed invoice and certificate of origin within one day. Moreover, the government has been helpful, and willing to share infor- mation about any services available. Today, Gahaya Links is the biggest Rwandan exporter under AGOA. However, it takes two months for the basket shipments to arrive in the U.S. Gahaya Links is now looking to diversify its product offering. “We have to keep the customer interested and experiment with new products,” says Janet, dangling in her hand a beautifully woven black and white earring that she plans to test out on the American market. Chapter 5 MOVING FORWARD: INTEGRATING GENDER CONCERNS INTO RWANDA’S INVESTMENT CLIMATE REFORM R wanda offers an encouraging exam- gender equity in the Constitution. For women ple of how post-conflict countries in business, the Chamber of Women Entre- can make gender issues a priority preneurs, operating under the Private Sector Federation, offers training and networking. and support women’s empowerment. Encouragingly, various government initiatives Reforms in the aftermath of the genocide have and organizations that promote private sector set the platform for transforming women’s role development, such as CAPMER, the Public- in society. The government has integrated gen- Private Dialogue Taskforce, and the Private Sec- der issues into major frameworks and policies, tor Federation have integrated gender concerns such as the Economic Development and Poverty into their work, and seem committed to further Reduction Strategy or its Vision 2020 strategy. addressing gender inequalities. CAPMER, for example, has funded women’s participation at The government has done all that they can trade expos, and helped with training, busi- to ensure equality for women before the law. ness plans, and securing financing for both Now the ball is in our court to develop the individual women entrepreneurs and women’s self-confidence and make something out of it. cooperatives (Box 5.1). As Rwanda’s govern- —Jeanne Mutakwayire, Neja Cosmetics ment continues major reforms to its business environment, it seems well placed to integrate These achievements have been helped by civil gender concerns. society organizations that advocate for women’s issues. Strong organizations include the Donors and international groups are also Rwanda Women’s Network and CSO PRO- increasingly encouraging women’s eco- FEMME Twese Hamwe, an umbrella group nomic empowerment. Some initiatives, such for 43 women’s organizations that played a crit- as the Millennium Villages project, focus on ical role in advocating for the incorporation of impoverished women in rural areas (Box 5.2). Voices of Women Entrepreneurs in Rwanda | 29 B o x 5 . 1 : C hristina R wayitare , M ode S avane A well-known artist in Rwanda, Christina has channeled her gift into an arts and crafts business. Her company, Mode Savane focuses on interior design, including home and garden decorations, tailoring, and production of exquisite hand-embroidered paintings using traditional, semi-abstract African images. Christina came back to Rwanda from Germany in 1995, and during an upcountry visit to her brother met women who were doing embroidery. “Their embroidery was not well done, so I offered to teach them how to do it better,” she says. Christina had worked in a fashion house in Germany for two years and was eager to apply and transfer the skills she had learned while working there. Now she trains small groups of women in six-month training programs, and has a team of 25 women from rural areas who produce fine art and embroidery for her business. While she has sold individual pieces to France or Canada, her market is mainly local, and items are bought as gifts or house decorations. “The best way to get a bigger market is to get access to exhibitions and do advertisements,” Christina says. She has already been able to benefit from opportunities offered by the government. She has attended exhibitions in Rwanda and Dubai, and was part of the Rwanda delegation at the 2007 Uganda Commonwealth Heads of Government Meetings. Others, such as Bpeace or Women for Wealth, are targeting more developed businesswomen. B o x 5 . 2 : D onors A re E ncouraging This focus by donors on women in busi- W omen ’ s E ntrepreneurship M illennium V illage P ro j ect ness in Rwanda is a break with previous aid practices to conflict-affected countries, which tended to often ignore women’s economic po- S pearheaded by Nobel Prize winner Jeffrey Sachs, Millennium Villages are a donor-funded initiative designed to demonstrate what it takes to reach the tential and focus instead largely on women’s MDGs in five years in rural African villages. Rwanda is one of the program’s focus countries. To reach MDG#3 on gender equality, in this Rwandan village of political contributions or human rights. Mayange the project has focused on giving women skills in business by starting the Imirasire Cooperative with 110 women basket weavers. Rwanda is also being used as testing ground Both donors and the government have provided significant support to the for innovative initiatives. For example, in early women. At the inception of the program RIEPA provided training to the weavers to improve their skills. The staff of the Millennium Village project has assisted 2008 Goldman Sachs and the University of women cooperative members in establishing a bank account, marketing their Michigan announced a partnership with the products abroad and securing orders. School of Banking and Finance in Kigali to The approach is paying off. Total sales from July to December 2007 were train 30 women on how to start and oper- US$10,000. For every US$10 basket, the women make US$6. With the weaving so profitable, women are now increasingly contracting out their housework so ate successful businesses. The program is part that they can focus more on the baskets. “The biggest difference has been to see of the new Goldman Sachs 10,000 Women the amount of confidence that women have gained through this project,” says Candice Franklin, the business development consultant for the project. The project Initiative, which focuses on educating business- has also linked up with a tour operator. For a fee tourists can visit the village and women in developing countries.37 Expanding see the women’s work firsthand. such training to a wider range of businesswom- Yet the group’s concern remains ensuring a market for the women’s work. Key to the sales so far has been a good support network of donors, many of whom en would help address the women’s clear desire are private wealthy individuals intrigued by the story of Rwanda’s women. for greater skills development and training. International staff employed by Millennium Villages has helped attract buyers and coordinated marketing efforts, but ensuring sustainability after their project While this report documents remaining chal- ends is a major challenge. lenges facing women in the private sector, it also showcases Rwanda as a success story and, tragedy of genocide and becoming even stron- in many respects, a model for others to follow. ger, as they create new hope and opportunities The stories of the businesswomen in Rwanda while rebuilding their society. illustrate how the women are overcoming the 30 | Voices of Women Entrepreneurs in Rwanda ENDNOTES Cited in World Bank. 2007. “Rwanda Coun- 1  10 World Bank. 2007. “Rwanda Country Eco-  try Economic Memorandum.” Volume 2. nomic Memorandum.” Poverty Reduction Poverty Reduction and Economic Manage- and Economic Management, Africa Region. ment, Africa Region. World Bank, Washing- World Bank, Washington, D.C. ton, D.C. 11 Cited in World Bank. 2007. “Rwanda 2 Republic of Rwanda. 2006. “Preliminary Country Economic Memorandum.” Poverty Update Report: Integrated Volume 2. Poverty Reduction and Living Conditions Survey 2005/2006.” ­Economic Management, Africa Region. National Institute of Statistics, Rwanda, World Bank, Washington, D.C. Kigali. 12 Republic of Rwanda. 2006. “Preliminary 3 Temesgen, Tilahun, Kene Ezemenari, Louis Poverty Update Report: Integrated Living Munyakazi and Emmanuel Gatera. 2006. Conditions Survey 2005/2006.” National “The Rwandan Industrial and Mining Sur- Institute of Statistics Rwanda, Kigali. vey (RIMS), 2005: Survey Report and Major 13 Temesgen, Tilahun, Kene Ezemenari, Findings.” The World Bank and National Louis Munyakazi and Emmanuel Gatera. Institute of Statistics of Rwanda. 2006. “The Rwandan Industrial and Mining 4 World Bank. 2007. Doing Business in 2008.  Survey (RIMS), 2005: Survey Report and World Bank, Washington, D.C. Major Findings” The World Bank and Na- Government of Rwanda and FIAS. 2006. 5  tional Institute of Statistics of Rwanda. “Sources of Informal Activity in Rwanda.” 14 Ibid. Washington, DC. 15  Ministry of Commerce, Industry, Invest- 6 Umutoni, Christine, 2007. “Walking the  ments Promotion, Tourism and Coopera- Talk: 22-23 February, Rwandan Women tives. 2006. “Sector Strategies Document: Parliamentarians Host an International Cooperatives Sector.” Kigali. Conference on ‘Gender, Nation-building, 16 Republic of Rwanda. 2007. “Economic the Role of Parliaments.” Background Paper. Development and Poverty Reduction Strat- UNDP, Kigali. egy 2008-2012.” Ministry of Finance and 7 Republic of Rwanda. 2006. “Rwanda Demo- Economic Planning, Kigali. graphic and Health Survey 2005.” National 17 Temesgen et al. op. cit. 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