On August 9, 1956, approximately 20,000 women marched to the Union buildings in Pretoria, South Africa protesting the apartheid pass laws that restricted South Africans. These special identification documents further segregated the population and infringed on the free movement of black Africans during the apartheid era. Any white person could ask a black person to show it, and those caught without passes could be arrested.
Women’s Day in South Africa falls on August 9th of every year and commemorates the march and the impact women had in the fight against apartheid government. To honor Women’s Day, Shared Interest, a U.S.-based nonprofit dedicated to socioeconomic development in South Africa, held a reception full of South African women entrepreneurs and their products at the Kaia Wine Bar in downtown Manhattan on August 7th.
Every aspect of the event displayed South African women entrepreneurship, including South African entrepreneur-owned Kaia Bar. Wine at the event came from women-owned vineyards in South Africa, and the custom bead jewelry being auctioned was created by a South African artist.
Shared Interest strives to showcase the potential in South Africa, which according to the nonprofit does not suffer from a shortage of capital, but rather from unequal access to capital for the majority of the population.
AFKInsider spoke with Donna Katzin, Shared Interest’s founding director, to discuss the organization’s impact in the South African banking and finance sector, how the social investment fund uses partial loan guarantees to encourage commercial bank lending as well as its special work with South African women.
AFKInsider: What exactly is Shared Interest?
Donna Katzin: We do not lend money. We are a nonprofit social investment fund and our goal is to move South African financial institutions to lend to the 80 percent of their country that should be a market. We started back in 1994, right around when Nelson Mandela was elected. We try and help people make the reality of economic and commercial growth their own. We focus on helping black African entrepreneur farmers, homeowners…get access to credit from the country’s leading banks and financial institutions.
We do this with money that we borrow from people in the United States. In the same way like when a student cannot afford tuition. They can get a scholarship or loan because somebody has cosigned for their loan. We are basically cosigning these loans for these individuals in South Africa so that they can launch their businesses, build their homes etc.
We do not do this alone; we have a partner with an organization in South Africa, the Thembani International Guarantee Fund. Thembani organizes and provides the technical support that these borrowers need. Sometimes they are individuals and sometimes they’re cooperatives: a women’s, agricultural or cultural cooperative. So, individually and also at the community level, we are committed to helping South Africans and the next generation.
AFKInsider: Tell me more about the reception event
Donna Katzin: It was really a star-studded event celebrating South African women and particularly their struggles and vibrancy. Many other women have come together to make this event special. The entertainment, the woman who sang is Vuyelwa Booi, a really well known South African singer. She has helped produced programs on women speaking out in South Africa and Civil Rights.
AFKInsider: How do these guarantees work and what type of risk do you open yourself to?
Donna Katzin: We move on the idea of leverage. We want the institutions of the country to serve their own people. We guarantee up to 75 percent of the loan that we move the banks to make. There is risk. If people should default in South Africa, our guarantee would be called off and we would have to pay 75 percent of the loan. Our entrepreneurs are particularly good borrowers, however. In over 20 years, our guarantee losses have only been around 3 percent.
AFKInsider: How do you seek investors?
Donna Katzin: More and more investors around the country and the globe are focusing on making an impact and helping to change people’s lives. So there is a market of people out there looking for investment opportunities. It’s not just big bankers either. Institutions, companies and every day people invest in us. Also, a number of people who were active in the apartheid movement understood this. They were the beginning. They knew the importance of pooling together resources to increase their communities’ opportunities.
AFKInsider: How do you choose which individual, business or family should have access to loans and your guarantees?
Donna Katzin: We are actually on the board of the credit selection committee, so we have an active voice in that. Clients come to us in different ways. Some of them come directly when they cannot get a loan from the bank. Some of them go to the bank first and then the banks come to us. Sometimes we work through incubators, these hubs that help businesses develop a plan, get support and eventually launch their business. We even go through other organizations. There is one in northern South Africa currently working with young farmers.
AFKInsider: Why the focus on women in this country?
Donna Katzin: It’s very significant that we choose South African women entrepreneurs, because even though in sub-Saharan Africa there are about an equal number of men and women entrepreneurs-in South Africa, half as many women are entrepreneurs. So these women in this country are up against particularly difficult odds. And not just traditional factors, like the patriarchy system, colonial rule or apartheid — which delegated women basically as reproducers or laborers. Even today, economic diversity is still not equal in the genders. Women are still facing tremendous constraints. Women can do income-generating activities, but the moment that there are contracts and credits attached to things, they often become men’s jobs.
When companies are looking to extend commercial markets, they are often not buying from women. When they are looking to extend credit to rural areas, they tend to not look for women clients. So, our job at Shared Interest is to understand these obstacles, and make sure that women have access and the opportunity to credit and access to markets so they can continue to grow, build and thrive. Since we’ve started doing this over 20 years ago, we’ve reached over 2 million black South Africans- most of them women.