shloboe boe
Gibson Mhaka
I’m passionate about my business, but the financial challenges are overwhelming. I feel like I’m drowning in a sea of numbers and have no idea how to stay afloat. Lack of financial literacy has been my biggest hurdle. I make so many mistakes because I don’t understand how to manage cash flow or interpret financial statements,” lamented Sheila Ncube (24), a young entrepreneur from Mzilikazi suburb in Bulawayo who is running a Handmade Crafts and Accessories business.
Sheila’s lament captures the frustrations and anxieties experienced by many young women entrepreneurs who lack the necessary financial literacy skills.
Although women and youth entrepreneurs play a critical role in driving economic growth, creating jobs, and fostering innovation in emerging economies, many women face significant challenges.
These challenges include limited access to financial resources, lack of business education, and societal barriers that hinder their entrepreneurial efforts.
Financial literacy is a crucial skill that can enable women to make informed financial decisions, secure funding, and effectively manage their businesses.
Despite their potential and resilience, many women lack access to critical financial literacy skills, which are essential for navigating the complexities of starting and managing a business.
This gap in knowledge often results in poor financial decision-making, limited access to credit, and an inability to effectively plan for the future.
Research indicates that women and youth entrepreneurs in developing countries like Zimbabwe are affected by systemic barriers, including societal norms, limited access to networks, and a lack of resources.
As a result, they may struggle to secure financing, leading to undercapitalised businesses that cannot compete in the market. Furthermore, many existing financial education programmes do not adequately address the unique challenges faced by women, failing to provide tailored content that resonates with their experiences and needs.
To address the unique challenges faced by a majority of female and young entrepreneurs, particularly those with home-based businesses, who often lack skills and knowledge of financial concepts such as budgeting and profit management, and consequently have less access to understanding the financial and economic systems and support schemes, the International Labour Organisation (ILO), in collaboration with the Government and various stakeholders, has launched its first Financial Education Training programme in Bulawayo.
The initiative aims to enhance financial literacy among women and youth entrepreneurs, promoting the sustainability of their enterprises.
Funded by the African Development Bank, the training targets 1 000 women and youth entrepreneurs aged 18 to 35 years across Zimbabwe, equipping them with essential skills for managing business finances effectively.
Speaking on the sidelines of the four-day training, ILO representative Fortune Sithole, said the training seeks to reduce the vulnerability of young people by equipping them with financial management and literacy skills.
“This lack of financial literacy often leads to the early failure of many youth-led businesses, particularly when they take loans without fully understanding the terms and conditions, resulting in unsustainable debt.
“In some cases, we find that young people fail when they start their businesses. This is often due to a lack of business management skills. Some of these young people don’t have business plans. We often say that a business without a business plan is like a ship without a compass — it simply drifts in whatever direction it finds itself.
“That’s why we have introduced another training programme called ‘Start Your Business,’ where we equip them with essential business management skills. The key outcome is a well-developed business plan that outlines their key functional strategies, such as marketing, human resources, ICT, and costing.
“With this training, we have seen the survival rate of businesses increase significantly, with some thriving beyond three or even four years. In contrast, businesses lacking these skills often crumble within six months or a year,” said Sithole.
He said their training programmes also address gender-related challenges.
“For example, some talented young women entrepreneurs face opposition from their husbands due to traditional beliefs and stereotypes. Husbands may feel threatened by their wives’ success and independence.
“To address this, we incorporate gender dynamics into our needs assessments, post-training support, and coaching. We conduct household visits to engage both the entrepreneur and their partner, fostering mutual understanding and support within the family,” said Sithole,
Dial-Honour Consultancies managing director, Shepherd Zhou, a partner in the initiative, noted the significant gap in financial knowledge among start-ups.
“Many start-ups operate informally without structured plans for raising or managing capital. This training addresses that gap, helping businesses grow sustainably by fostering wise financial decisions in areas such as borrowing and saving,” he said.
One of the beneficiaries of the training Larna Gwata (20) explained that she learned and benefited greatly, noting that as female entrepreneurs running home-based businesses, they often lack financial skills, and that she found the concept of prudence particularly valuable, as it teaches them not to overestimate income and underestimate expenses, guiding them to recognise potential losses sooner and delay recognising gains until they are realised.
“I benefited greatly from this training. As female entrepreneurs who often run home-based businesses, we frequently lack the skills and knowledge of financial concepts. One valuable concept I learned is prudence.
“This principle teaches us not to overestimate income and underestimate expenses. Essentially, it guides accountants to recognise potential losses and liabilities sooner rather than later, while delaying the recognition of gains and assets until they are realised and certain.
“By adhering to the prudence concept, financial statements provide a more realistic and reliable picture of a company’s financial position, preventing businesses from overstating their financial health and potentially misleading investors and stakeholders.
“It helps ensure that businesses are prepared for potential downturns and encourages responsible financial management,” she said.
Another beneficiary, Vuyo Mguni, said the financial education training has been a game-changer.
“This financial education training has been a game-changer. I finally understand the basics of budgeting, cash flow, and financial planning.
“Learning about the prudence concept, for example, has completely shifted my perspective. Now I’m much more careful about how I manage my money.
“I’m setting realistic financial goals, tracking my expenses diligently, and making informed decisions about pricing and inventory.
“I feel so much more confident and in control of my business. This training has given me the tools I need to not just survive, but actually thrive,” said Vuyo.
