Africa leads the world in terms of numbers of women business owners, with women making up 58% of the continent’s self-employed population. In fact, women in Africa are more likely than men to be entrepreneurs — not necessarily because they have a passion for something or the right skills, but because they are often the only breadwinner in the family. However, a 2019 World Bank report, Profiting from Parity, shows that women entrepreneurs across Africa continue to earn 34% less profit on average than men. If you dig a bit deeper, you’ll find that in many African countries, most women-operated businesses have little opportunity for growth.
Challenges women entrepreneurs face
Women’s equality has been a long-standing issue in society and women entrepreneurs in Africa face a number of unique challenges. One of the biggest is cultural barriers. In many African societies, women are not seen as equal to men and are often not given the same opportunities to succeed. This can make it difficult to get the resources and support they need to start a business.
Women are equally disadvantaged when it comes to education. They are more likely to be married off at a young age and not given the opportunity to attend school. Even if they are able to attend school, they are often not able to complete their education due to early marriage or pregnancy. This educational gender gap has far-reaching consequences. Women are less likely to find employment, and when they do, they are likely to be in low-paying jobs. As a result, women entrepreneurs often have to rely on their own resourcefulness and hard work to build successful businesses.
From a financial inclusion perspective, women often don’t have access to formal financial services such as bank accounts, credit or financial advice. According to the IMF, in sub-Saharan Africa, only 37 percent of women have a bank account, compared with 48 percent of men, a gap that has only widened over the past several years. This lack of access can have a ripple effect on their ability to participate in the formal economy. Without access to banking services, women are at a disadvantage when it comes to starting or growing businesses. They may also be more vulnerable to exploitation by lenders who charge high interest rates and may find it hard to save for retirement on unexpected expenses.
More women-owned businesses are thriving
Despite these challenges, women entrepreneurs are increasingly making their mark on the world. With their determination and drive, they are proving that anyone can succeed in business. One example of this is Kenyan based business owner Evette, a local dressmaker who supports her children and extended family. After her husband died, she was left with no way to earn an income. She decided to start her own business. With the help of a neobank, she was able to apply for a micro-loan and buy a sewing machine and some materials. Now, her business is slowly expanding as her customer base grows.
The role fintechs play
Fintechs, such as Be Mobile Africa, are making a big impact in the lives of women entrepreneurs by providing them with the tools they need to manage their finances, send and save money and make payments. In addition, they are helping to drive down the cost of financial services, making it more affordable for women to grow their businesses.
By leveraging their unique perspectives and experiences, women entrepreneurs are able to create thriving businesses and in doing so, they are changing the face of entrepreneurship in Africa.