By Lawrence Paganga
LILIAN Masiye (27), an informal cross border trader, was in dire straits. After sales at her duvet stall plummeted, she applied for a bank loan to keep her business going, but it was not approved because she didn’t have a fixed salary or collateral.
“It was emotionally disturbing,” she said.
According to the United Nations Development Programme (UNDP), Masiye had a flourishing business importing and selling duvets and kitchenware in Zambia’s tourist capital, Livingstone, a hub for visitors to the Victoria Falls that borders Zimbabwe.
But she took a massive hit as a result of government’s Covid-19 restrictions.
It prevented her from crossing into Zimbabwe, South Africa and Botswana to buy her goods.
The Covid-19 certification fee of US$55 charged at the borders also increased the cost of doing business.
To keep their businesses operating, Lilian and other traders pooled their funds, using middlemen or runners to buy and deliver their goods. “But there is a lot of risk with such arrangements, and it is twice as expensive,” she said.
More than 70% of Zambia’s informal cross border traders are women.
Yet in patriarchal societies like Zambia, when a woman from a marginalised community wants to start or grow her own business, the odds of a loan from a traditional financial institution are heavily stacked against her.
But Lilian has bounced back, thanks to her entrepreneurial spirit and the Africa Borderlands Centre Innovation Challenge project funded by UNDP and led by its UNDP Accelerator Labs, which is helping border communities in Zambia overcome the double hit from Covid-19 and climate change.
Lilian is among the 75 business owners, mostly women and young people, who were trained in digital and financial literacy as well as basic entrepreneurial and group savings.
The Innovation Challenge project was made possible with funding of more than US$250,000 from the Africa Borderland (ABC), an initiative led by UNDP to conduct research, policy analysis and programming dedicated to Africa’s borderlands and from UNDP Accelerator Labs in Zambia and Zimbabwe.
Working through the Cross Border Traders Associations in Livingstone and Victoria Falls Town in Zambia and Zimbabwe, UNDP Accelerator Labs in both countries in 2021, began discussions with “local problem solvers” to find ways to keep traders in business.
VillageSavers, a Zambian start-up, created an app that helps traders manage their savings while providing digital and financial literacy training to help their businesses grow.
The ABC-funded project also helps cross border traders buy and sell their goods online.
Thumeza, a Zimbabwean logistics start-up, uses a digital transporter tracking system. This aims to address the challenges traders face due to travel restrictions and mandatory Covid-19 certifications.
According to the UNDP, 75% of rural Zambians live in poverty and single mothers and breadwinners like Lilian are among the most vulnerable in Zambia’s patriarchal traditional communities, where age-old customs dictate a woman’s life. This vulnerability is compounded by the ravages of climate change and the Covid-19 pandemic.
Each entrepreneur will receive a smartphone to help them keep track of all financial transactions including savings, which constitutes a vital record of a person’s ability to save and to repay a more formal loan.
Records from a baseline survey show that at the start of the project, almost none of the participants had savings. As a result of the initiative, all were able to save as a group and get low-interest loans, which they are now successfully repaying.
With physical record-keeping, the group saved US$110. After they began trusting the tool more, funds started growing. By the end of February 2022, the traders had saved more than US$3,500.
At the Zambia-Botswana border in Kazungula, 68 kilometres from Livingstone, Getrude Mateu, who trades in perishable goods, was also struggling. She ended up dumping sacks of rotten fruits in the landfill after the pandemic stopped tourists from coming.
“We will now have solutions to make sure we have some financial security to handle whatever surprises come our way,” she said.
Cross border trade is the socio-economic backbone of borderland communities.
“The role of the Africa Borderlands Centre is to create a launch pad for this innovation, spark new innovations and support the scaling of solutions that benefit all borderland communities,” said Zeynu Ummer, Team Leader and Senior Technical Advisor.
UNDP is optimistic that the relatively small initiatives will yield big results.
“Widening access to finance for informal cross border traders into vibrant micro-entrepreneurial activities has a significant potential, not only to help reduce poverty, but contribute to food security and drive a stronger recovery from COVID-19,” said Lionel Laurens, UNDP Resident Representative in Zambia.
Lilian, a single mother, with a child and three other dependents, was previously only making enough to meet basic needs. She remembers redirecting her business capital to covering family needs when the pandemic put cross-border trade on hold.
She is happy to know that her work is contributing to a brighter future for the children who rely on her for support.
“I have been able to pay school fees for my children, unlike before, when the income from my business was uncertain,” she said.