The entrepreneurial ecosystem has been on a steady rise around the world. So has the growth of female-owned businesses and establishment. This has been especially so in Africa where growth has been driven by the creation of women-centered policies and programmes for empowerment, and women-focused accelerators and boot camps.
Sub-Saharan Africa boasts the world’s highest rate of women entrepreneurs, at 27%. For most African countries, most female-led enterprises are small businesses with little opportunity for funding and growth but that isn’t stopping them from trying to achieve their goals.
But even with these developments, there’s still a lot to overcome for women who are setting and operating business within Africa.
Women from Africa have had to face a myriad of challenges in running their businesses.
Firstly, most women have to contend with the ‘old boys’ networks which still hold a great deal of power in Africa. To combat these there have been creation of female business initiatives that encourage sharing of expertise and experiences, and foster collaborations. But a lot more needs to be done to counteract decades old practices where many business deals are negotiated informally, in male-oriented settings like bars and social clubs. Creation of more business networks that are accessible to more women and encouraging women to join and participate will go a long way in leveling the playing field.
Secondly, there is an ingrained myth in society that sees men as better risk takers hence more likely to succeed in building startups which are seen as venturing into something that is unsafe, risky and more difficult than usual. As such, many financial institutions and other sources of funding for startup such as angel investors and VCs aren’t as quick to grant loans to female entrepreneurs as they are to male entrepreneurs.sources.
According to a new report by The Boston Consulting Group (BCG) and MassChallenge, a global network of startup accelerators, despite performing better in terms of revenue generated, women-owned companies receive far less in startup financing than companies founded by men. In fact, female-founded start-ups receive only 2% of total investments by venture capitalists.
Culture is also seen to play a huge part in the success of lack thereof startups as pertains to gender. According to Odunayo Eweniyi, cofounder and chief operating officer of Piggybank.ng, from a young age, culturally, women are groomed to believe that the kind of behavior, work or endeavors that fit these descriptions are bad for them. Many times, women are not allowed to aspire ‘too high.’ As a result, they tend to participate in the least risky ventures.” All this prevents women from reaching greater heights of success.
Also, the fact that there are so few women in leadership roles in the tech industry in Africa means there are even fewer female role models to inspire the next generation of women leaders. If there were more women in leadership, there would be far less discrimination against them, because these women leaders would use their influence to fight against such discrimination,” notes Ms. Eweniyi.
These disparities not only underscore the need for more women at all levels of start-ups, they also show more needs to be done to encourage more women to become startup founders and grow their businesses.
There is a need to build a pipeline of female talent with the skills and ambition to build successful tech start-ups, and this requires changing the old mind-set that technology or big business is for men.
One way is to come up with business initiatives that address Africa’s unique cultural situations hence able to resonate with women on the continent. To help with this African women entrepreneurs need basic knowledge about health, education, financial security and safety.
With data showing the spending power of women continues to increase on the continent, putting pressure on tech companies to make efforts to understand women consumers’ needs and expectations, there is need to include more women in positions of leadership within the startup ecosystem as they may have an insight into the needs of fellow women consumers, and are best positioned to introduce products that cater to female consumers’ preferences.