20 OLD NALEDI AND POVERTY IN THE CITY Isaac Ncube Mazonde Abstract Focus on rural poverty in the developing world has underplayed the existence of urban poverty, which. in some cases, is becoming more accute than rural poverty. So far, rural-urban migration has not triggered investigations into its effect on the urban areas. This paper aims to redress this issue, using as a case study Old Naledi, a slum of Gaborone, Botswana's capital city. Its scope is the small scale traders. The paper contends that in order for poverty to be eliminated, a poverty profile of the poor communities needs to be given. This enables systematic development planning of the community by the authorities. To that end, the paper presents and analyses the socio-economic data of the small scale traders in Old Naledi. The paper highlights afew main findings. It is mainly the women that do the trading in Old Naledi. Most of them are small scale traders who are part time entrepreneurs in that they have a regular job which pays them very little. Two things undermine small scale trade in Old Naledi. These are the City Council regulations which demand that these traders have trading licences, and the large scale traders who trade in Old Naledi but live outside the township. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 21 Introduction In Botswana, the poverty issue is more than pervasive. Despite a programme sustained public investment in social sector development, resulting in public expenditure ratios of between 32% and 44.5% in each of the 10 years between 1983 and 1993, well over 40% of the Batswana were still reported to be living below the Poverty Datum Line (POL) in the year 1993 (UNDP/Botswana Government/UNICEF 1993:97). The proportion of Batswana living in poverty has increased rather than decreased during years of high GDP growth. Although the high expenditure in social sector development has resulted in a general improvement of the indicators of quality oflife in Botswana, poverty is still a major problem in 1995, almost 30 years since Botswana gained her independence. A quarter of the population below the POL (or 10% of all households in Botswana) currently relies heavily on government support under programmes such as Drought Relief, Remote Area Dwellers Feeding Programme, and those under which the Social and Community Services Unit feeds the destitute. The disparity in the distribution of national assets and income is glaring. The top 20% of the population earns almost 24 times as much as the bottom 20% (UNDP/Botswana Government/UNICEF 1993:15). Not only are such disparities no longer acceptable; without decisive action they will tend to be self-reproducing. Since independence in 1966, the thrust of government efforts to deal with development has focused on rural areas. But the movement of people from rural to urban areas has been phenomenal. From a population that was only 10% urban in 1966, Botswana now has a population that is above 40% urban (Botswana Government 1995:46). While it is necessary to continue with the development effort in the rural areas, it is clear that urban areas also need similar attention very urgently as the persistence of poverty in the rural areas is likely to accelerate rural-urban migration. There are many ways in which the government can address urban poverty. One way would be to deal with it by focusing on one section of the urban poor at a time. Another would be to address it through a policy of urban development that targets all poor population groups at the same time. Aim of the Paper The primary aim of this paper is to lay a basis for taking decisive action to combat poverty among a section of the urban poor. It does that by investigating the possibilities of alleviating the poverty of small-scale traders in the slum Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 22 settlement known as Old Naledi, in Gaborone. The paper attempts to achieve that goal through an in-depth survey and analysis of the key entrepreneurial variables of the microentrepreneurs concerned, as viewed against the entrepreneurial climate or setting of Old Naledi. In effect, the analysis unmasks the potential for entrepreneurial expansion among traders (most of whom are women) in this settlement. Some of the variables that are analysed relate to the microentrepreneurs, while others are institutional. The paper provides a poverty profile of the entrepreneurs. A poverty profile is an analytic device for summarizing information on sources of income, consumption patterns, economic activities, and living conditions of the poor (World Bank, 1993:32). Normally, a poverty profile starts with a defmition and measure of poverty based on one or more poverty lines. However, poverty lines capture only the income or the consumption dimension of poverty. For greater policy relevance, data are also needed on the living conditions of the poor and also on the economic environment in which they operate. This is the approach taken in this study. The study presents more data on income than on expenditure or consumption. This has been predicated by the difficulty encountered in collecting data on expenditure. More attention is paid to women, not just because female small traders outnumber their male colleagues, but more so because it is now widely accepted that household income levels are more easily improved when economic empowerment is afforded women than in cases where it is accorded to men. A recent study has confmned what was observed a few years back, namely, that women spend more on family necessities if earnings accrue directly to them (World Bank, 1993:30). Because they put their family needs first, they do not usually operate their microenterprises on a commercial scale, or on commercial lines even where they claim business to be their primary occupation. Nevertheless, the subordination of women to men is still a reality in the developing world where the traditional social Structure also denies women privileges which are enjoyed exclusively by men. For that reason, development programmes which are designed broadly for the poor do not usually benefit wo~en unless specific mechanisms are put in place to direct them to women. In view of the foregoing, power relations between women traders and their sp?uses will. be investigated in this study, to show how that affects the m~croenterpnseas well as the use of cash within households among Old Naledi mlcroentrepreneurs. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 23 Objectives of the Research More specifically, the broad objectives of this paper may be stated as follows:- I. To conduct a survey of conspicuous small-scale economic enterprises in Old Naledi. 2. To study the constraints to enterprises in this settlement, with respect to personal limitations of the microentrepreneurs and the institutional limitations. 3. To establish the entrepreneurial characteristics of the poor in Old Naledi. Objective 3 above includes these variables: gender, level of formal education, disposable income, monthly turnover, regularity of the turnover, age, headship of household, marital status, type of enterprise(s), length of time in this enterprise. The reason for collecting data on the length of time in a particular enterprise is largely to give an idea of the frequency with which new businesses are mushrooming in this township. As will be shown later, Old Naledi is mainly a transient settlement through which people pass from one phase of their lives - while they are seeking ground on which to lay their feet economically - to a higher phase in which they live a relatively better life. Methodology Fieldwork for this study was done over six months, from February to August in 1993. To execute the study in terms of the stated objectives, data was collected in Old Naledi with the assistance of four research assistants, two of whom were female. The point in hiring female assistants was to attempt some gender balance even in the collection of data. This was especially necessary since it was envisaged that the majority of entrepreneurs would be women. The team of four assistants surveyed the whole of Old Naledi and identified a total of 169 traders. This figure was then taken to be the total number of traders in Old Naledi. Out of it, 107 traders (or 63%) were females. Following from that, a universal sample of all such traders was taken, as the figure of 169 was considered small enough to be handled by the team in the six months that was allocated for fieldwork. This means that all the 169 traders of the slum settlement were visited and interviewed. A questionnaire which Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 24 encapsulates all points raised under the objectives was administered by the assistants on every trader. In a socio-economic study of this nature, quantitative data need to be complemented with qualitative one. To that end, direct observations were made in addition to the administration of the questionnaire. Observations were made largely by the reseacher and to a smaller extent by the assistants. Observations focused mainly on discernible living conditions, relationships between neighbours, the mood of the residents etc. Data collected through the questionnaire and by observation were then processed in terms of the objectives of the study. Tables were produced to summarise different kinds of information, for example, the number of males and females, income distribution, age profile, number of traders with kiosks etc. The tables (1-6) capture various types of the poverty line data that were deemed necessary to answer the research questions. Although data in the tables are quantitative, some qualitative data were also collected by both the assistants and the researcher. Qualitative data are used in the text to give more meaning to figures. The description of the physical and social conditions of Old Naledi in the next chapter, for example, is based largely on qualitative data. Data for institutional constraints were collected by the researcher through interviews with a Licensing Officer of the Gaborone City Council, a manager of Barclays Bank and a Trade Officer in the Ministry of Commerce and Industry. Results of the Study Physical and Social Condition Of Old Naledi Ever since 1965 when Old Naledi was built, its social conditions have always been deplorable. In spite of whatever upgrading was done around 1979, the slum still lacks most facilities commonly found in planned site-and-service areas of Botswana's urban areas. The settlement looks older than elsewhere in Gaborone due to dilapidation. There are no permanent roads except for one tarmac road that traverses the settlement. Many dirt roads within the township end nowher~. Sanitation is deplorable. There is no sewerage disposal system. Only pit latrines are used. Storm water drainage is chaotic as no ditches have been erected for that purpose. Nor are there stand pipes in the individual hom~steads. The~e are. a few standpipes which appear rather clustered in certain areas, leaVingqUitelarge POrtionsof the township unserved with water. Pula: Botswana Journal of African Studies Vol. 10 No 2,1996 25 Streets have no lights, although the City Council is planning to provide lights on all main streets. Consequently, travelling at night is very dangerous and most crimes are committed under the cover of darkness. The only possibility to make a telephone call is at the single telephone booth near the police station. Long queues usually form for those wishing to make a call. Although many dwellings have been upgraded from structures that were initially erected with plastic and cardboard boxes to small tin-roofed houses, overcrowding remains a big problem. Such high congestion of dwellings means that the risk of fire is very great. If fire broke out, it could be devastating and would consume a large part of the township within a very short space of time. Not much would be salvaged. The reason for the high congestion is best explained historically. In earlier times, before title deeds were given for Old Naledi plots, many dwellings were made from flimsy material. Then, a landlord simply owned an empty plot and then leased a specified amount of space on it to different tenants who would put up a dwelling. The landlord was all out to make as many leases as possible on his plot, while for their part, those to whom the space was leased tried their best to reduce risks of financial loss by using the cheapest building materials. The reasoning of the tenants was that if they used cheap materials for putting up dwellings, then they did not lose much if they were evicted by the landlord or when they chose to move out of the plot, following an increase in the rent or if congestion within the plot worsened. The result of such policies by landlords was that, on a plot of 300 square metres, it became common to find two to three households made up of couples and families of up to five members (Larson 1986: 13). So much congestion induces a low health level among Old Naledi residents. Although Old Naledi was turned into a site-and-service area after it was upgraded, its health level is worse than what obtains in other site-and-service areas. Health workers doing their turns in this slum acknowledge this fact. The most frequent diseases for which the residents of this slum come to the clinic for help are those normally associated with overcrowding and a low standard of living. These are tuberculosis, malnutrition, sexually transmitted diseases, respiratory diseases and assaults that are connected with excessive consumption of alcohol. However. quite a few decent houses have recently been erected on the larger plots of Old Naledi. There are signs of improvement in a few others. Three homesteads actually had electricity, one also had a perimeter wall. Nevertheless, the general background remains bleak. The average plot size is about 200 square metres, ranging from 180 to 280 square metres. This figure compares with the site and service plots that are provided under the Self-Help Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 26 Housing Agency scheme (SHHA). SHHA plots have an average size of 269 square metres (Botswana Government 1992:16). On almost every other plot there is a 'shebeen queen' (popularly known as she- bee) selling chibuku. The high frequency of 'shebeen queens' is actually a manifestation of high levels of informal sector in this slum. In 1986, about 26% of the plots in Old Naledi were used for informal businesses as well as dwelling places. At the same time, slightly more than 50% of the households were dependent solely upon the informal sector. At least 75% of those engaged in the informal sector were women (Larson 1986:4). Currently, the percentage of households engaged in the sale of chibuku beer has increased, as is indicated later in this study. Poverty Line Data So far, only a narrative description of the harsh circumstances under which Old Naledi residents live has been given. Presented below in the form of tables are some data on poverty line of the microentrepreneurs of this township. The narrative and the tabula information are meant to compliment each other. Missing from the tabular data below are figures on property ownership. Attempts to solicit such information from the respondents did not bear fruit. As a result, income is the only guide to the amount of resources that the microentrepreneurs command. Tables are presented first, after which discussion and analysis of data in them follows. This arrangement is designed to enable the reader to make a full scan of all data so as to refer more easily to them when it is discussed under various sub-topics later. The source of all data in tables I to 7 is field work which was done by the reseachers over six months in 1993. Pula: Botswana Journal of African Studies Vol. 10 No 2,1996 27 Table 1 : Demographic And General Characteristics Of Respondents No. of respondents: 169 Males 62 (36.6%) Females 107 (63.4%) Average age 35.2 years Age of youngest trader 17 years Age of oldest trader 69 years Unmarried 41 (24.2%) Married 70 (41.4%) Divorced 4 (2.4) Average no. of dependants 6 Cohabiting 54 (32%) Table 2: Educational Levels Number of respondents 169 No formal schooling 18 (10.6%) Some primary education 129 (76.4) Some secondary education 22 (13%) Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 28 Table 3: Kiosk OwnershIP Number of respondents 169 Number owning kiosks 120 Chibuku beer kiosks 120 (71%) Number selling from a stall at market place 24 (14%) T a ble 4 : T urnover Total number of respondents 169 Average monthly turnover from trading P 753.39 Lowest monthly turnover from trading P 140.00 , Highest monthly turnover from trading P 12,000 Median monthly income from trading P460.00 Respondents with another income 122 (72%) Number with income from employment 80 (47%) A verage monthly income from employment P 401.68 Lowest monthly income from employment P 100.00 Number with income from rental 43 (25%) Average monthly income from rental per renting household P 87.00 Highest monthly income from another source P 2,500.00 Average living expense for all traders P 253.80 Lowest living expense per month P 60.00 Highest living expense per month P 1,700 Note: 42 businesses (25%) are not more than three months old in Old Naledi 'This figure is from a larger scale trader who is resident outside Old Naledi. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 29 Table 5 : Housing Total number of respondents 169 Traders living in own houses 79 (46.7%) Traders renting room/house 90 (53.3%) A verage rent paid P 87.00 Lowest rent paid P 12.00 Highest rent paid P 270.00 Table 6 : Market Preference No. of traders living in Old Naledi 164 (97%) No. of traders living outside Old Naledi 5 (3%) Number preferring Old Naledi for market 109 (64.5%) No. desiring other parts of Gaborone 21 (12.4%) Number desiring out of Gaborone 34 (20.1%) Main Labour Market Characteristics of Traders Wekwete (1993) underscores the need to identify and clearly describe the urban poor as well as to isolate their main labour market characteristics. Under this subsection, this important requirement will be fulfilled, on the basis of the data given in the tables above. The need to clearly distinguish the poor from others in a place like Old Naledi is very important because in this community (and indeed in other slums elsewhere) there are poor people as well as others who are not so poor. The characteristics of the different socio-economic groups are also different. It is crucial to separate them and not to lump them together. One of the overall aims of this study is to investigate the economic relations between the different socio-economic classes. Pula: Botswana Journal of African Studies Vol. 10 No 2,1996 30 The analysis of the data in the tables calls for some breaking down of certain figures. For example, Table 4 on turnover shows that 80 respondents (almost half the total number) acknowledged receiving an income other than that from trading in Old Naledi. In fact, 75 of them are employed, so that this second income is actually a wage. Most working respondents (48 out of 75) ~e employed within the lower echelons of the formal sector, as security guards m government offices and in fIrms. A total of 19 of them work as labourers in the construction industry and the remaining seven are cleaners. One of them owns a small shoe repairing company, which is located in Gaborone but outside Old Naledi. He has the highest turnover of P2,500 per month from it. This means that paid employment clearly favours men. Security guards and labourers have both been traditionally male roles. But a few women are being recruited into these jobs purely as a result of pressure from women's organisations, which press for a gender-balanced approach to employment. Consequent upon that, some eight women are now engaged as security workers while some five work as labourers in the construction industry. The employment of women as labourers in the construction industry was hitherto unheard of. All seven cleaners are females. Of the three categories, cleaning is the least paid. The average wage for a cleaner within the. formal sector where four of them are employed is P350.00 per month. Three of them are employed as house-maids, with an average monthly wage ofPIOO.OO.The averages for the two male dominated job categories of security guard and construction worker are P500.00 and P470.00 respectively. What this means is that income from wages (what is reflected as the second income in Table 4) goes mainly to the males and only to a very small extent to the females. The fact that women are mainly employed as cleaners would seem to corroborate the general observation that in the developing world, poor women are found in lower-end jobs with lowest pay levels (World Development, 1993:240). Considerati~n of income from trading does not change this trend in any way. Table 4 on ~come ~er shows that the average monthly income is P753.39. The lowest mcome IS shown as P140.00 per month, while the highest is PI2,000. Due to the great differential between the highest and the lowest figures, the median fIgure becomes more useful than the arithmetic mean. Therefore, P460.00 (the median figure) is a better guide of what the average trader makes per month than the P753.39 which is the arithmetic mean. PP~ul~a.:"j. B~ort;ts~w;;a~na;;;-j;Jo~u;;;m::a:l1 a:::if"Al&:frj::'ca==-n -;:;S:-tu-;d:-ie-s----V-a-I. -1-0-N-a-2-, -19-96- 31 Two related points of importance need to be highlighted in this connection. Table 1 shows that the majority of traders receiving this amount are women (107 females out of a total of 169). Although only 24.2% of them are unmarried, from casual interviews it became evident that a large number of those who reported that they were married or cohabiting could not count on a regular fmancial support from their spouses, who seldom gave them any money. When they did give them money, the amounts were small and came at very irregular intervals, even among spouses that had a regular income. It is important to see the average income earned in relation to the effective minimal level (EML). The EML is one and a halftimes the poverty datum line (POL). It is preferred over the POL because the POL is thought to leave out many poor people, erroneously classifYing them with the middle income groups. The last EML figure to be calculated by the Statistics Office was for the year 1989. At that time, the POL for Gaborone city was calculated to P 150.39 per person. The average size of Old Naledi households is 6 persons. The POL for an average household would therefore be around P902.34 in 1989. The EML would therefore be P1353.51 for an average household of six in Gaborone. It is expected that these figures would have risen by the year 1995, in line with the general increase in the cost of living. Nevertheless, the biggest problem with the figures is that they were calculated for Gaborone. Assuming that it is half as costly to raise a family of six in Old Naledi than it is to do so in other parts of Gaborone, we would say that the EML for Old Naledi in 1993 would have been somewhere around P676.75 (which is half of PI353.51). Even though this figure is reduced by half, it is still higher than the median income figure of P460 from Old Naledi microentrepreneurs. What this seems to suggest is that the Old Naledi microentrepreneurs are the poor in the true sense of the word. Some thirty percent of the urban dwellers had incomes equal to or below the EML in 1989. Clearly, these microentrepreneurs are included in that figure of thirty percent. The next point takes us to another common feature among poor people. In general, women complained that their spouses drank too much and often spent too much money on beer. Cases of men coercing their spouses to give them money came up occasionally during interviews. In some instances, women were threatened but no case of actual violence or manhandling was reported. Both married men as well as males merely cohabitting were said to be fond of pressuring their spouses to give them money. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 33 In some cases, therefore, people come to settle in Old Naledi when they already have a job. This happens in cases where people find it difficult to continue to pay relatively higher rent in other parts of Gaborone. Such a situation appears to inflate the level of employment within the township. As observed earlier, most waged people in this slum are employed in the construction industry where there is virtually no job security and where jobs are temporary by their nature. Such a situation seems to conform to the general pattern across developing countries where the poor are not always found only in the informal sector but also in the formal sector. As Wekwete rightly points out, the issue is not the sector one is employed in but rather the low wages and low productivity (Wekwete, 1993:3). With respect to business, the low formal educational level among Old Naledi residents implies that the microentrepreneurs rely to a large extent on intuition for the needed business skills and lack the back up support that formal education normally provides. Low formal educational levels among residents of Old Naledi also make it difficult for these people to participate in decision- making structures which design their welfare. There are three Councillors for Old Naledi, but committees which in other parts of the city assist the Councillors are non-existent in this township. In other words, the participation of these people in the development of their community is low, in comparison with that of others elsewhere in Gaborone. Consequently, it would appear that the lack of services to residents of this township is bound up with their lack of participation in the political decision making structures. Ownership of an ideal marketing locality is a great advantage for any entrepreneur. Table 3 on ownership of kiosks shows that the overwhelming majority of Old Naledi microentrepreneurs (120 out of 169 or 71%) are those that sell their goods from a kiosk. In addition, there are 24 other kiosks which sell nothing else but chibuku beer. The number of microentrepreneurs who are renting a stall at the two market places of the township are 25, or 15% of the total number of entrepreneurs. The divide between the two market outlets - the kiosk on the one hand and the stall on the other - actually describes a major economic relief, namely, the divide between the formal sector and the infomal. Quite clearly, the type of trading that occurs in the kiosk belongs fully to the informal sector, while that which goes on in the stall as well as that carried out in the stores falls within the formal sector. The trading that is based at the market place is facilitated by the state in that the stall is built and rented out by the state. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 34 Therefore, this type of trade - unlike that which obtains in kiosks - is able to meet the specified official requirements, some of which relate to standards of cleanliness and regulated times of running the business. Premises where the market stalls are located are inspected constantly for health purposes. Entry into the stalls is also restricted in that a licence is required as a condition for obtaining one. Payment for the licence and for the rent would suggest that the starting capital for those traders in the market place is significantly more than what it is for the type of trader who operates from a kiosk. This is especially so when one considers that even the range of goods sold is wider in the stalls. However, running a kiosk also requires a licence, although many kiosks operators do not have one, as is indicated later under Institutional Constraints. The advantages of selling in a market place stall over doing business in a kiosk is best appreciated when fmancial returns from these two outlets are compared. The average daily revenue generated from a kiosk is a meagre P30.00 against a staggering P120.00 from a rented stall. Microentrepreneurs who rent a stall at the market places pay a monthly fee of P200.00. This amount is nothing compared with the more than P2,000 that such traders make in a month, on average. For both the entrepreneurs selling at the market place and those doing so from their kiosks, great fluctuations in turnover are reported. Business gets much better on weekends and on month ends, when most of the wage-earners receive their pay. Housing is another major factor in the general life of Old Naledi residents, especially the traders. Table 5 shows that only 79 of the 169 microentrepreneurs live in their own accomodation, while more than half of them (90 or 53%) live in rented accomodation. The housing situation in this township also sheds more light on the fmancial relationships across the different economic sectors. The average rental paid is P87.00 per household per month. Since in some cases one plot can hold up to 10 households, it can be inferred that some landlords make a good income through letting out their plot to many households. Although specific figures are not available, the range of monthly income from renting out accomodation would seem to lie between P87.00 and P600.00. Some of the microentrepreneurs that live in their own accomodation also rent out portions of their plots. Usually, such landlords have erected some respectable small building for their own use. Income from rentals is usually used to boost trading. In general, the allocation of fmance across different economic activities is done haphazardly and without records or accounts being kept. Consequently, it is not easy to measure the profitability of trading. Pula: Botswana Journal of African Studies Vol. 10 No 2,1996 35 It is significant to note that these people generate income from a number of economic ventures. In this respect, their economic strategies are in line with the commonplace around the developing world. In Manila, for example, the poor do two to three jobs to make ends meet. In that country too, like we have shown for Old Naledi, the poor who are employed within the low paying levels of the formal sector also enter the informal sector to supplement their incomes (Mathur, 1993:4). Yet, that is not to suggest that everybody who does trade in Old Naledi is poor. Table 6 shows that 5 traders (3% of the total) live outside Old Naledi. These are actually the largest traders, two of whom own a store each in the township, two of whom rent a stall in the market and one of whom runs a panel-beating outfit. These large traders have penetrated the township purely to take advantage of lack of trading facilities at the scale and scope at which they are providing them. It is they who make the most income in this slum. The highest income of PI2,OOO per month was reported by one of the two store dealers, who happens to own the largest trading outlet in Old Naledi. Institutional Constraints Having considered the characteristics of the individual microentrepreneurs, attention is now focused upon institutional constraints. Institutional constraints refer to problems that are attributable to the state through its development programmes, and its rules and regulations which govern trading, as well as problems that are posed by the formal sector organizations such as the commercial banks. Under this sub-heading, attitudes of people towards women will also be discussed because women are the majority of the traders in the township. The first constraint relates to licencing regulations for traders. A hawker's licence is required for the kind of traders who operate in a kiosk. Yet, quite a number of kiosk owners in Old Naledi operate without a licence. Normally, they pretend to have one whenever they are asked, especially by researchers. However, once in a while the City Council authorities make spot checks and close down kiosks of microentrepreneurs who are found not to have a licence. Consequently, many kiosk owners operate in fear and do not sell to customers they suspect to be authorities or spies. This practice has the effect of thinning down their share of the market which is already saturated by the prevalence of many kiosks selling similar goods in close neighbourhoods. The second point relates to credit facilities. According to one observation, the urban poor are among the most entrepreneurial people in society (McKee, Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996 36 1989: 993). Yet, they are denied credit by commercial banks because they are considered a bad risk since they lack collateral. In addition, because small traders borrow small amounts of money, transaction costs to the banks are very high. As a result, commercial banks tend to avoid lending to many small borrowers. Those that are disadvantaged in this manner are the very poor, mostly the women with many dependants. In Old Naledi, all the 169 traders interviewed were aware that they could borrow money from commercial banks. Not even one of the kiosk operators admitted having tried to borrow from a commercial bank. A shared feeling among them was that such banks would never lend to them, since they would be considered not credit worthy. By contrast, the two largest traders had sizeable loans with the commercial banks. In fact, although they would not disclose the amounts involved, they admitted that they stocked their stores with merchandise bought with money loaned by the commercial banks. Large wholesalers also regularly gave them credit facilities to enable them to order the stock. This was not the case with kiosk operators. Seven of the 25 traders who rented a stall at the market place also had been lent money by a commercial bank. Six of them (or 86% of those that had been lent money) were males. The gender imbalance in favour of males in this case illustrates a cultural disadvantage of being a woman within Botswana's cultural social setting. In terms of the regulatio~s of commercial banks, married women must be assisted by their husbands when borrowing money. Otherwise the banks may not lend them the money. Conclusion This paper sought to investigate the possibilities of alleviating the poverty of traders in Old Naledi. It sought to achieve this aim through a presentation of the po~erty profile of the residents of this settlement, and then analysing the ~tentIaI for ~eir expansion as entrepreneurs. It is mostly the women that trade m.Old Naledl. The overwhelming majority of them are small-scale traders, or ml~roentrepreneurs. The traders of Old Naledi are heterogeneous in terms of therr background but also show the same attributes over certain matters. Some of them came to the settlement directly from the rural areas while others have relocat~d in this township from Gaborone, where they had lost a job or where they failed to fmd affordable accomodation. Some have a job while others do not. Some of those with a job as well as others wi~out one also own and operate a kiosk. What this means is that some Old Naledl traders are engaged in more than one economic activity. Incomes Pula: Botswana Journal of African Studies 37 pooled from the various economic activities are low but the expenditure is high as the average number of dependents is six. A number of the microentrepreneurs who operate a kiosk do not have a licence. The City Council regulations require everyone who operates a kiosk to have at least a hawker's licence. Law enforcement officers of the City Council make spot checks and arrest kiosk operators who do not have a licence. Consequently, traders without a licence are very much restricted in their business as they have to evade such officials. This has the effect of lowering their turnover. The kiosk operators, who form the majority of traders, do not receive any credit facilities from the wholesalers, nor do they borrow Hloney from financial institutions. These microentrepreneurs are considered a bad risk by wholesalers and financial institutions. It is not that they are unaware of these possibilities, either. The truth of the matter is that they do not have enough courage to approach the financial institutions because they are well aware that collateral security, which they lack, is a condition for obtaining loans. Wholesalers may not require collateral security but clout is necessary for a customer to be assisted. In spite of their lack offormal education, the microentrepreneurs are conscious of all these things. By contrast, the two largest traders who operate in Old Naledi but reside outside the township had sizeable loans with the commercial banks. Wholesalers also gave them credit facilities. It is likely that this gesture fuels the success of their enterprises. The mid-range entrepreneurs who rent a stall at the market place also had at least some loans from the commercial banks. All this serves to reflect the disadvantage in which the microentrepreneurs find themselves relative to the larger scale traders in Old Naledi. While the majority of traders that operate a kiosk are women, those who have loans are mostly males. This further demonstrates the weaker position of women in terms of trading. A related issue that is of significance is the relationship between husbands and wives with respect to business dealings. Women often do not receive any entrepreneurial support from their spouses. Instead, women complain that more often than not their spouses (husbands or the men they cohabit with) press them to release the income from trading for use during their endless drinking sprees. In this context, a real hardship for married women is that in order for them to obtain a loan from a commercial bank, they need to have the full cooperation of their husbands. Eventually, the hardship faced by women is Pula: Botswana Journal of African Studies Vol. 10 No 2,1996 38 aggravated by the fact that they have to support their large households as well as their spouses. Bibliography Botswana Government 1992 Review Of The Self-Help Housing Agency. Gaborone: Ministry of Local Government, Lands and Housing. Botswana Government 1995 World Summit On Social Development. Botswana National Report. Gaborone: Ministry of Finance and Development Planning. Central Statistics Office 1992 Population of Towns, Villages and Associated Localities. Gaborone: Ministry of Finance and Development Planning. 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Nairobi: Urban Poverty Management Programme,.Discussion Paper. World Development 1993 World Development, 17(7): 231-251. World Bank 1993 "Poverty Reduction Handbook". World Bank Report, 1(2): 1-242. Pula: Botswana Journal of African Studies Vol. 10 No 2, 1996