Raising start-up capital is one of the biggest challenges for women entrepreneurs in Kenya’s key manufacturing sector, with banks requiring collateral that most of them do not have, a new study has found.

Most women work or run businesses in the informal economy, and face numerous difficulties including pay and promotion disparities, as well as obstacles in accessing information, technology and finance to expand their enterprises.

Manufacturing contributes about 10 percent of Kenya’s gross domestic product but women account for only 17 percent of the sector’s workforce, according to the study by the International Centre for Research on Women and Kenya Association of Manufacturers published Tuesday.

“While government initiatives encourage enterprise development, most respondents reported difficulties in accessing those funds. Instances of sexual exploitation in exchange for credit facilities and compliance clearances were mentioned,” the report said.

As a result, most women-owned manufacturing businesses are still micro-, small- and medium-sized enterprises (SMEs) operating in the informal sector – unable to grow and enter the formal economy.

Naomi Ndele, head of SME and agribusiness at Kenya’s KCB Bank, said banking policies needed to be reviewed to incorporate women.

“The banking model was designed by men to support men and so a lot of lending policies and methodologies are very restrictive and do not favour women,” Ndele said during a webinar launching the report.

“There are few known financial institutions that have remodelled their business to incorporate the needs of women,” she added.

Ndele explained that while there were some financial products on the market that were geared towards women, they did not include the sizable credit often required for manufacturing businesses.