The study investigated the livelihoods strategies of the informal women traders involved in savings and micro credit schemes in the HCBD. A good rapport conducive for a mixed-method was established with the respondents to determine intervention strategies that develop the livelihoods of the informal women traders. Data were gathered in the following parameters; Socio-demographic profile of the respondents, the nature of the business, the formation of MCSs, types of lending schemes, profit sharing and terms of payment, member’s benefits, challenges encountered, why women engage in micro-credit schemes, policy implications, the way forward and conclusion.
Socio-Demographic Profiles of the Respondents
The first data presentation involves the profiles of informal women traders and informal men traders to represent.
Figure 12 shows the demographic profiles of the respondents who participated in the study. These were 90 informal women traders doing business at flea markets and 10 informal men traders doing business at the flea markets to represent. Chirisa, (2013) observed that “in general terms, women have more challenges than men”. The ages of the respondents ranged from 22 to 50 years.
NATURE OF BUSINESS
The third data presentation involves the nature of the business of the informal women traders. The studyexplores the sources of livelihoods of informal women traders doing business at the flea market.
Traditional Handicrafts
|
Imported Items
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Handmade bags
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Clothes and hand bags
|
Crocheted garments
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Children’s toys
|
Basketry
|
Blankets
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Handmade mixed products
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Kitchen wares
|
Weaved/ knitted garments
|
Shoes
|
Traditional pottery
|
Accessories
|
Locally made weaved floor mats
|
Furniture
|
Source: Analysis from in-depth interviews
Table 1 shows the nature of businesses of the IWTs at the flea markets. The 90 informal women traders and 10 key informants indicated that they were involved in savings and MCSs at the flea market. The majority of the activities were on buying and selling assorted local and imported goods that ranged from traditional handicrafts, clothes, handbags, blankets and kitchen wares to children’s toys. The IWTs were also selling handmade mixed products comprised of weaving, knitting, and crocheting whilst others were selling imported products from other countries. Several reported that they were selling traditional products such as pottery, basketry, locally made weaved floor mats.
The respondents indicated that they engaged in various savings and micro-credit schemes because some individuals found themselves living in poverty. Mulwa, (2008) says “micro savings and credit schemes refer to more structures saving and loaning facility created and managed by its members”. These loans are loans acquired informally from people in the same network, and formal credit lending institutions like banks and microfinance institutions (Mugabi, 2010).The motivation of the study was to appreciate the challenges and copings to suggest comprehensive interventions and sustainable livelihoods strategies that could be used by the informal women traders. The vast majority of informal women traders were involved in savings and MCSs at some flea markets in the HCBD which became attracting centres for women who aspired to do business and MCSs. These activities were planned to outsource the required livelihoods, enhance socio-economic development, setting standards for poverty eradication and improving the living standards. The majority of IWTs had a long tradition of working together as groups based on social relationships revolving around kinship ties, gender or village memberships. The study found that for IWTs selling local products, their business was lower than those selling imported goods since some considered the local products to be of cheap quality than the imported products. Several IWTs indicated that some consumers prefer expensive materials regardless of higher prices. The researchers’ observation was that the emergence of imported products from other countries had pushed aside the local products. This influenced the position of informal women traders in boosting income in a meaningful way under the prevailing economic hardships. The informal traders who imported products for sell tended to benefit more than those who sold local products.
Quality of Micro Scheme Investment
The fourth data presentation is from the findings on the quality of savings and microcredit investment used by the informal women traders doing business at the flea markets. The response shows that IWTs at flea markets were involved in MCSs not governed by any legislation or policy frameworks. Mupambireyi, (2014) confirm that “the informal sector operate outside the realm of official regulatory frameworks and workers are not registered, regulated or protected under the labour legislation and social protection”. The IWTs mobilized themselves and planned their MCSs of their interest with affordable rules and regulations they understand better. Through pooling the resources together based on the group or socio-economic ties to form savings and MCSs (locally known as rounds or mukando), some women grouped themselves together in a participatory and comprehensive approach. The groups contributed a certain agreed amount of money per week or month. The women traders decided among themselves on how they used the money though bound by a simple constitution which stipulates written down rules and regulations. The group rules guided the operations of their schemes on certain aspects for example registration, contributions, benefits and code of conduct. Zheke (2010) confirms that when the group is too big, the group members can be subdivided into smaller units of (6 to 20) members to manage their schemes efficiently and effectively. The grouping process is usually reported to be simple as it does not need any paperwork. Zheke added that some groups are usually small and structured after preliminary meetings are held to decide how many should be in a group and how much each member was to contribute per day, per week, per month or year. Zheke affirmed that normally interested groups are invited to join the rounds or mukando based neither on their educational background nor economic status. In reality, these are based on characteristics such as trust, honesty, reliability, and punctuality, savings potential and locality and many more. Once the group is structured, members decide on when to meet and how they want to share the generated profits basing on the group constitution. By pooling financial resources together, women manage to improve the sources of livelihoods which ultimately increase resilience to risks and shocks such as illness, death in the family as well as pay medical bills. If a member changed a place of residence from the particular flea market to another, the respondents indicated that this automatically disqualifies an individual from being a member of savings and MCSs. The departing member will join another group where she is going to operate from. One IWT member reported that she had not joined any group but had decided to do a self-motivated scheme for the reasons best known to her. The woman informed that she had constructed a self contribution strategy in which at the end used the money to purchase items from foreign countries which she sold at the flea market. The self-motivated respondent had this to say;
“I decided not to join the group but rather to do it alone and every day I put aside a certain amount. On the first day, I put aside one dollar, the second two dollars, the third three dollars and so forth until the end of the month in which I raised USD460 dollars for myself. I used the money to order new items or for any other contingencies and me this works very well” (Interview with the informal woman trader 20 June 2018).
The savings and MCSs’ arrangements fostered motivation among women who seized the stage and decided to make a distinction in their lives. Mugabu (2012) aver that “the provision of MCSs in such a measure is meant to reduce the burden of poverty among households wherein interveners can support schemes in the form of loan procedures and paperwork, combined with accounting experiences especially access to formal sources of credit”. The savings and MCSs at flea markets operate devoid of policies and legal frameworks to protect their investment that require some form of interventions by Government and financial institutions to protect and empower the vulnerable Informal women traders doing business at flea markets.
Terms of Payment and Profit Sharing
The fifth data presentation narrates the terms of payment and profit-sharing among the beneficiaries.
Figure five illustrates how some respondents paid back the loan. Some though expressed that they were failing to pay back the loan on time. “A typical and predominant problem in saving and micro-credit scheme is loan defaulting” (Mulwa, 2008).Those who reported failing to pay back the loan on time were fined as per the agreed amount. Some women paid the agreed amount every week whilst others paid back every month without being charged interest and others were charged interest. Even though some members were comfortable with the terms of payment, others expressed that they were not satisfied and uttered dissatisfaction with the terms of payment. A few members complained with regards to the method of payment, time of payment and the interest payable to the lender. Mulwa, (2008) enlighten that the principle operating with savings and credit scheme is saving regularly, borrowing wisely and repaying loans promptly as agreed with the group. However, some women borrowed the agreed amount and paid back the loan with or without interest charged on them.
Several IWTs provided financial support as short term loans (merry-go-round) to their members under a special arrangement. Merry-go-round is also a localized initiative of informal savings and credit facility which is usually organized among very close friends (Mulwa, 2008). The money contributed by members is usually not kept in whichever bank account other than alternatively circulating within group members where terms of payments are stipulated. The women doing business then share profits after every six months and sometimes give each other groceries for example salt, sugar, salt, cooking oil and soap. Some members indicated that they received less than $200 per term whilst the majority articulated that they received above $500 more than others which revealed some variances in their administration. Mulwa, (2008) clarify that group members in both merry go round and savings and credit schemes contribute equal amounts of money on a regular basis. However, a handful of poor women highlighted that they struggled to pay back the loan. The informal women traders found themselves paying back the mortgage through other sources apart from the benefits through tokens or gifts from relatives which even made it difficult to translate into loan interest. These terms of payment and profit-sharing among informal women were a good strategy, although there is a need to put in place clear guidelines to avoid possible conflict and misunderstandings among the group members. Mulwa, (2008) aver that “savings and credit schemes are not meant to give charity, neither is it meant to maximize on profits, but simply to give service to its members at cost”.
How Women used the Money Borrowed
The sixth data presentation narrates how informal women traders used the money they borrowedfrom the savings and MCSs.
Figure 6 illustratehow women used the money borrowed from the scheme. The responses explain that the borrowed money was used for the following; buying and selling was reported (14) food kinds of stuff (24) and bus fare expenses (26), property investments (13), education (11) and health care (12). The highest expenditure was on food staffs whereas the lowest was medical bills. Although the amount agreed upon was small, some members found it difficult to pay back the loan on time. For example, one member expressed that she was raising money to pay hospital bills for a relative diagnosed cancer in the amount of (USD1, 800) and the money was insufficient to meet those costs. Mulwa, (2008) enlighten that the amount is usually too small for formal requirements of most commercial and financial institutions. The scheme generated reasonable income that improved the living standards of the very poor, and set reasonable standards for poverty eradication.
A few group members revealed that they managed to send their children to school, accessed quality health care, improved their living standards, paid monthly rentals on time, and bought new stands. Most remarkably, one member revealed that she was able to purchase a motor vehicle. Berhane of Action Aid (2009) concurs indicating that more resources in the hands of women mean better health, quality living standards and education for the whole family, as women spend the money on schools and medicines for their children. The majority of informal women traders reported that they needed money to purchase various items for various reasons. Thus lessons learned from the Grameen Bank, (2012) confirm that MCSs allowed women to care for themselves and their families. The findings demonstrate that IWTs use the money borrowed from group schemes to address their special needs which they were not able to do before. Mulwa, (2008) conclusively corroborate citing that “savings and credit schemes are built on the assumption that everybody will have something to save no matter how poor”.
Reasons why Women Engaged in Micro Credit Schemes
The seventh data presentation shows thereasons why women engaged in savings and MCSs at flea markets.
Figure 7 shows the reasons why IWTs preferred to engage in savings and MCSs while doing business at flea markets. The responses varied as some expressed that they joined the schemes to share risks (10), to plan for the future (15), for economic reasons (20), pulling resources together (25) and sharing experiences (30). However, the responses on sharing experiences were the highest whilst sharing risks was the lowest. The IWTs carry out business at flea markets mainly to sell their products and share experiences. Chirisa, (200013) aver that life in the informal sector is not as easy as it seems in which informal sector players operate in a risky terrain which require the competitors to come up with their own coping strategies that allow them to continue with their trade.
The other reasons why women joined savings and MCSs were to provide them with a base from which they can protect themselves against any form of contingencies. Some added that risk-sharing and pooling resources together for poverty eradication were the foremost reasons. The responses explain that informal women traders decide to provide capital to the marginalized women who are unable to access loans. Zimbabwe Poverty Report (2017) buttress that in urban areas, poverty is the highest among households that depend mostly on their business. The schemes facilitate the IWTs to gain access and control of livelihoods resources and to eradicate poverty where opportunities prove limited otherwise.
Some IWTs are proficient to invest in such businesses and secure distribution channels to start making more money consistently. Purohit, (2012) corroborate stating that informal women traders engage in savings and MCSs for empowerment and as resolute pathways to eradicating poverty. Some indicated that in the past, informal women traders failed to qualify for traditional loans provided by Commercial Banks. This is why scores of IWTs decided to join the savings and MCSs as sources of livelihoods to cushion them and for poverty eradication. The poor women in general have no collateral security and funds to pay back the loans. Mulwa, (2008) aver that contributions mark up should be affordable to all members of the group, including the economically poor. The micro-enterprise owners can then begin enduring and thickening their pockets and thus narrowing the Poverty Datum Line (PDL). SIDA (2001) corroborate averring that “there is a need to access capital, livelihood strategies, and decision-making power through processes, such as policies, the legislation”. Some positively indicated that the involvement in savings and MCSs in a critically strained economy is fundamental because the initiatives escort them to overall economic growth. Individuals are bound to acquire a steadier income which makes it possible to buy more products to sell and generate extra income for them to sustain. Kofi Annan (2012) aver that savings and MCSs are a wise investment in which women who are regarded as a minority group are likely to venture into initiatives even if they encounter social and economic challenges more than their female or male counterparts who are not part of the scheme. In the past, it is acknowledged that IWTs did not have protected ways and means to save the money but with the MCSs fortunately, IWTs prove proficient to earn hard cash which is bound to circulate among its members for them to purchase items and sell them later.
Challenges Faced by Women in Poverty Eradication
The next data presentations illustrate the challenges faced by IWTs doing business at flea markets to explore on sufficient sustainable livelihoods for poverty eradication.
Table 2: Challenges Faced by informal women traders
Type of Challenge
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Frequency
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Expected outcome
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Lack of Start-up capital
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30
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Poverty
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Unpredicted weather patterns
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15
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Reduced income
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Harsh economic conditions
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30
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Low income and poverty
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Lack of policy and legal frameworks
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10
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Poor management
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Limited net working opportunities
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12
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Economic Isolation
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Increased completion among IWTs
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17
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Conflict and misunderstanding
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Depressed consumer demand
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33
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Reduced product interests
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Lack of proper working infrastructure
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15
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Burglary and products damage
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Lack of proper management ethics
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20
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Violation of customer rights
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Lack of markets to sell their produce
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20
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Reduced income and poverty
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Lack of incentive ad subsidies
|
06
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Apathy or reduced morale
|
Source: Analysis from in-depth interviews
Figure 5 confirm some of the challenges faced by IWTs at flea markets whilst attempting to eradicate poverty. Women who faced challenges with regards to lack of start-up capital, constituted 30 and unpredicted weather patterns recorded 30. Harsh economic conditions and lack of legal policies to protect their businesses was 15. The slightest was those respondents who lacked networking opportunities which recorded 10. Additional challenges include; increased competition, depressed consumer demand and lack of proper working infrastructure. Several respondents communicated that they faced challenges in paying back the loan. When they borrowed money from the group, some did not fully understand the permissible terms associated with the loans. Mulwa, (2008) is of the view that “women decide on the savings or contributions within their financial capacity”. The majority indicated that sometimes individuals receive loans with good terms but fail to understand the requirements because some take the loan devoid of complete information on how individuals repay the loan.
The respondents highlighted that unpredicted weather conditions as some of the challenges encountered by women doing business at the flea market. Women communicated that some of the items sold at the flea market were seasonal. Those selling winter and summer clothes faced challenges due to change of weather from winter to summer and vice versa which always leave them with abundant stock after every season. This affected their business and ability to pay back the loan. The majority expressed with concern that there were no proper structures to secure their items during the rainy season. Several women reported that sometimes they were forced to close their stalls as individuals had no proper roof or building structures to store their products during either hot or rainy season; hence for them their business was a loss.
The other challenges describe personal problems such as paying school fees, hospital bills and rent which was a good excuse for not being able to pay back the loan within a stipulated period which necessitated dropping out of members. Mulwa, (2008) propound that “inconsistency in contributions and rate of drop-out among the members sometimes leads to low morale among the group members”. Thus sickness and death in the family have been cited as another major cause for not opening the business for some time. A few members disclosed that when they are bereaved, the affected members close their businesses for days, weeks or even months to recover from grief and bereavement after losing their dear ones. The respondents disclosed that, traditionally, the bereaved cannot sell or even join the scheme to gain profit in a meaningful way.
Lack of proper management expertise and misuse of funds was some of the challenges experienced by members who expressed that this affected their business. A few women were said to be misusing the money purchasing luxury items instead of generating profits for the business as well as paying back the loan on time. During interviews, one woman always mentioned that the money was used for “personal items”which some of the group members regarded as misuse of funds. Mulwa, (2008) warn that dishonesty has often led into premature withdrawals of those who have benefited, thus creating conflict and protest from those who are still waiting for their turn”.When the researchers probed further for clarification on the issue, the responded was undecided to simplify what she meant by the word “personal use”. The researchers concluded that there was a lack of proper mechanisms to check-up on the proper use of funds among women micro-credit operators. It was clear that the women encounter adversaries at the flea market. Mupambireyi (2014) reveals that those deposited involuntarily in the informal sector due to the Economic Structural Adjustment (ESAP) in the early 90s are facing a raft of challenges.
Another comparable challenge was that there was a missing subsidies, incentives and policy guidelines on savings and MCSs for women doing business at flea markets for poverty eradication as there were few de-motivating factors. Several respondents also highlighted that when they strive to import goods for sale, occasionally these are confiscated at the border post or they faced hassles at the border post. Several respondents expressed that sometimes officials besiege their goods demanding immigration declaration forms for some imported wares.IWTs mentioned that in as much as they wanted to work according to the law and regulations but at times they are uninformed and as a result are forced to hide some of the goods and not declare them. Chirisa, (2008) reveals that the transactions are usually not documented and those who participate in such trade do not pay taxes to the revenue authority. The respondents constantly expressed that officials at border posts sometimes clash with vendors who sometimes fail to prove that their wares have been officially declared at the country’s designated entry points. Some respondents mentioned that when they declare goods at the border post, some due to illiteracy find nowhere written that one should keep safe the declaration forms for future reference. Murwira (2012) observed that some vendors imported goods in bulk and sell them at different flea markets across the HCBD which makes it difficult to keep the required declaration forms at the selling points. As a result, the border post officials encounter some deceptive vendors who miss out some declaration processes at each country’s entry points which deprive the state millions of dollars in revenue. Murwira (2012) in that regard emphasize that that those officials track them down and collect what is due to the state.