Caption: GroFin women entrepreneurs from Sub-Saharan Africa and MENA regions.
Which region would you say has the highest proportion of female entrepreneurs? Many would believe it is the advanced world, with US and Europe leading the charge, as these regions normally do. But, while it may come as a surprise to most, it is Sub-Saharan Africa that is a trailblazer on this count.
Indeed, the SSA region boasts a much higher number of female entrepreneurs compared to other regions of the world. The Global Entrepreneurship Monitor Global Report (GEMGR), which is the world’s leading study on entrepreneurship, states in its special study on women and entrepreneurship that rates of female entrepreneurship in Sub-Saharan Africa are comparable to their male counterparts.
In fact, emerging economies like Ghana, Nigeria and Zambia boast significantly higher participation of women in the start-up space compared to advanced economies like USA and France. In Ghana, for instance, there are 28% women entrepreneurs, compared to 10% in USA and only 3% in France.
However, most of these women entrepreneurs tend to be owners of small businesses and local community shops serving the unmet needs of their homes and local community. While many women clearly have the vision and capacity to build successful businesses, then what is it that is holding them back from that much-needed growth spurt? Why is it that women-owned enterprises tend to be ‘dwarfed’, and peak at a much lower size than those owned by their male counterparts?
Part of it can be explained by lack of full-fledged societal support for women entrepreneurs, as they continue to be held primarily responsible for the well-being of their family, even as they take on the challenges and complexities of managing their own business.
Pamela Muyeshi, the owner of a GroFin funded business Amaica, a restaurant specialising in authentic Kenyan cuisine, feels that striking a balance between running a family and a company can be difficult.
She states matter-of-factly, “Women continue to face the dual responsibility of ensuring that their business is running and their family is stable.”
So, while it is safe to say that women entrepreneurs need the economy, does the economy also need its women entrepreneurs?
Fortunately for women entrepreneurs, it appears that the economy does need them, and, in fact, would be a better place for their presence in it. Going back to the report, the GEMGR special study shows that female entrepreneurs are generally more satisfied, and, on an average, have better work-life balance and a higher sense of well-being. Significantly, a better gender balance in entrepreneurship could imply greater work-life balance for society as a whole.
Coming to GroFin’s specific interactions with women entrepreneurs in the region, experiences from our investment officers bear out that women entrepreneurs tend to be more diligent with their repayment, translating into businesses that are more sustainable over the long term.
Moreover, research from the World Bank has proven that women invest a greater portion of their earnings into household health and education, improving quality of life for the next generation and creating more meaningful social and community impact. Women entrepreneurs in the GroFin portfolio are quite well represented in high impact areas covering schools, health clinics, pharmacies, MFIs or other social and community-driven businesses. Finally, female-owned businesses tend to have higher turnover growth and much greater low-skilled job creation.
Thus, not only at a gender equality level but also at an economic level, it makes sense to convince talented and dynamic women who are considering starting their own business to cross the final hurdle. In this process, we firmly believe that other women entrepreneurs could play a vital role as mentors and role models to spur other female-owned businesses to greater heights.
For more on women entrepreneurship in the region, turn to our recent client success story showcasing Cherish Eye Enterprise of Nigeria, a successful optometery consultancy practice that is run by Joy Aghogho Money.