Kenya: Closing the credit gap for women entrepreneurs

8 min read

Civil law struggles to ensure rights at odds with customary systems and restrictive social norms


Women hold less than 10 percent of the available credit in Kenya

Source: Landesa

In Kenya, though women have the legal right to own land, in practice they own land at a rate of just one percent, with only five percent of land held jointly by women and men.

The Gender Inequality Index (GII) is an index that measures the human development costs of gender inequality. Kenya ranks 126 out of 155 countries.30

Kenya is a legally pluralistic state, in which multiple legal systems operate simultaneously. Statutory law was enacted when Kenya was still a British colony. Kenya now has a Constitution, which is proclaimed as being the supreme source of law; any law that is inconsistent with the Constitution is deemed void to the extent of the inconsistency. There is also Islamic law, which applies to Muslims and is connected to a specific set of courts (Kadhis' courts) dedicated to dealing with interpretation of Islamic law and disputes between Muslims. Lastly, there is customary law, which consists of the unwritten norms and practices of smaller communities that predate colonial times. These competing systems are often in tension and can serve to restrict women's rights. Thus, though a review of black-letter law would suggest that Kenyan women possess many of the same rights as Kenyan men, the restrictive effect of these additional legal frameworks means that in practice women endure significant inequalities. Moreover, social norms further limit women's financial inclusion.

The prominence of Islamic law in the lives of Muslim women, and of customary law for those who still adhere to such practices, creates a legal system in which the rights of women are subject to numerous, often conflicting, interpretations. In regions where Islamic law is prominent, many statutes do not apply, since the provisions on equality espoused in the Constitution are "qualified to the extent strictly necessary for the application of Islamic law before the Kadhis' matters relating to personal status, marriage, divorce and inheritance."

When it comes to the law proper, a number of laws complement Kenya's constitutional commitment to equality. Under the Employment Act, the Minister, labor officers and the Industrial Court are charged with the duty to "promote equality of opportunity in employment in order to eliminate discrimination in employment." The Act prohibits Employers from discrimination "on grounds of race, color, sex, language, religion, political or other opinion, nationality, ethnic or social origin, disability, pregnancy, mental status or HIV status." Moreover, there is an affirmative quality to the Act in that it states that concerted steps to bolster equality do not fall under the banner of discrimination: Employers are empowered to "take affirmative action measures consistent with the promotion of equality or the elimination of discrimination in the workplace."

Business law is an area where law and custom collide. There is no strictly legal hindrance women face in forming a business. However, women are subject to dated stereotypes and often invoke significant disdain in the business world. In its research on social norms, The International Center for Research on Women found examples of women business owners who were derided as "prostitutes."31 Such attitudes are especially common in rural areas of Kenya. In light of these prevailing attitudes, women often lack full awareness of their legal rights. According to The World Bank, only 8.6 percent of businesses have majority female ownership in Kenya as of September 2014.32

Land rights and marital arrangements also indicate the primacy of cultural restrictions, pointing to the persistence of a "gendered economy" in Kenya. Although customary rules and laws are recognized in Kenyan legislation and although the Kenyan Constitution invalidates customary rules that are inconsistent with the Constitution, "women's customary rights to property in Kenya remain severely limited." Women's rights to land are often dependent on a relationship with a man, and women may not traditionally own or inherit land. This has broad implications for women's ability to enter into business. Limited land ownership results in lack of collateral for loans, and access to finance is the "single biggest constraint" for women in business. Women hold "less than 10 percent of the available credit" in Kenya.33

The 2012 National Land Commission Act, one of three land reform laws passed that year, established a National Land Commission for the management of land, in part to remove the discriminatory practices against women. Other statutes enacted or proposed to achieve this aim include the Trust Land Act, the Land Adjudication Act, the Land Disputes Tribunals Act and the Land Consolidation Act. Yet, there are several customary laws that inhibit women's property rights. According to these laws, women only have the right to use land and even then, still require permission to access. Customary laws, which often discriminate against women and limit their land and property rights, govern at least 65 percent of land in Kenya, and the patriarchal nature of Kenyan society often limits the rights of even those women not living on land governed by custom. Some estimates indicate that as little as 1 percent of land is titled in the names of women and 5 to 6 percent is titled jointly by women and men.34

In 1981, Kenya established The Law of Succession Act, which enforces equality between men and women. In practice, these rights are not applied equally to all citizens, and inheritance is determined by customary law that prevents women from improving their socio-economic status. Further, the Law of Succession Act does not apply to agricultural land and crops or livestock in various districts enumerated in the statute. Instead, the law that applies in those jurisdictions is the law of the deceased's community or tribe that governs intestacy. More broadly, the Succession Act does not apply to testamentary or intestate succession if the deceased is a Muslim, in which case succession is governed by Islamic law. Kenyan law grants widows the right to live on their late husbands' property until they die, but poor women are often evicted by relatives. Under Islamic law, daughters typically inherit only half of the share to which sons are entitled. Wives receive one-eighth of a husband's estate if there are children, or otherwise one-fourth. In addition, there is evidence that women have been forced to give up their land to male relatives and, at times, submit to social pressure by selling their land cheaply.

Women's ability to access the justice system is limited by legal costs, traditional justice systems, illiteracy and ignorance of rights. Divorced and separated women are especially vulnerable. The adjudication process is still being conducted in favor of the already established male inheritance rights and therefore discriminates against women in relation to family land. Women are deprived of their land rights through informal pressure to give up land even if the law entitles them to it. Disinheritance seems to be on the rise, particularly in areas hit hard by poverty.



30—The higher the GII value, the more disparities between females and males and the more loss to human development.
31Anne Stangl et al., "Enhancing women's entrepreneurship in Kenya: Initial qualitative assessment of the ILO's GET Ahead business training programme." The International Center for Research on Women, 9 (2015).
32The World Bank. (2013). Enterprise surveys: What businesses experience: Kenya 2013 [Data file].
33Ellis, A., Cutura, J., Dione, N., Gillson, I., Manuel, C., & Thongori, J. (2007). "Gender and economic growth in Kenya: Unleashing the power of women." Report prepared for The International Bank for Reconstruction and Development / The World Bank.


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