Africa has the highest proportion of women entrepreneurs in the world. That is a happy statistic to celebrate, especially during South Africa’s Women’s Month. However, funding opportunities are disproportionately low for the relatively high number of women entrepreneurs that Africa boasts. Many women own or run businesses in the continent, but few – very few – are the recipients of funding.
Why not?
In this article, we’ll take a closer look at the socioeconomic constraints that continue to impose a glass ceiling on the upward mobility of African women entrepreneurs – as well as how to shatter them. The barriers to the economic success of many entrepreneurial women may be unseeable, but they are not unbreakable.
Africa boasts a high proportion of women entrepreneurs, but relatively few funding opportunities
According to the Organisation for Economic Co-operation and Development (OECD), more than 25% of all African businesses were either started or run by women. By contrast, the rate of entrepreneurial activity in Europe is just 5.7%.
Unfortunately, despite the record-high rates of entrepreneurial activity amongst African women, the rate of funding leaves much to be desired. According to Disrupt Africa, women founders receive less than 7% of venture capitalist funding – even though they make up about 20% of all company founders.
Of course, there are other forms of investment and development funding. However, as SPEAR Capital associate Jessica Blake writes for Reuters, it’s telling that “a sector that’s supposed to be future-oriented and at the forefront of innovation struggles to invest in women at anything like the same rate that they’re starting businesses.”
Fortunately, there is opportunity elsewhere for women entrepreneurs to access the funding they need to expand their growing businesses – opportunity that is revisited in the closing paragraphs of this article.
Why aren’t women entrepreneurs receiving as much funding as men?