Investing In Women: What Do African Female Entrepreneurs Need?

Written by Anna B. Wroblewska

Policy experiments to help encourage this shift abound, though some seem to be more successful than others. The key takeaway is that education in itself is not enough — the right kind of education can create the economic and social incentives required to make a change.

Another critical restraint is finance: one study found that differences in productivity between female- and male-owned businesses are largely due to inequality of access to “productive inputs.”

While it is a rather thorny and complex issue with not simple answer, the benefits to investing in women when it comes to entrepreneurship and work are well-documented.

“Investing in women”

Working women can have an outsize effect on macroeconomic growth; one estimate puts annual GDP per capita losses from women’s underemployment at up to 27 percent, depending on the region.

Women working is so important that the International Labor Organization regards it as the most powerful means of poverty reduction in developing countries.

This could in part be driven by the fact that women are more likely to spend their incomes on their children and their communities, creating what development experts call a “virtuous cycle” of ever-increasing returns.

More income sources for families can also help on a personal level, not only with respect to smoothing income but to tipping the balance of power in relationships (there is a wealth of economic literature on power and negotiation in relationships which is far beyond the scope of this article).

But, again, there is a large step between owning a small business and owning a high-growth, investor-backed one.

To get from small business to private equity-financed business will simply require more: more education, more access, and more opportunity. Start-up financing could be an important part of this.

Van der Merwe said, “Increased access to funding and business guiding at this early stage… would serve to break some of the many obstacles faced by women — and would help unleash broader and more balanced economic development and growth.”

The support of female entrepreneurs will also require those more basic general measures that help all entrepreneurs: education, infrastructure, access to finance and markets, and of course, for the large swaths of the African population it is relevant to, the very basics around health and nourishment.

For those ambitious women who wish to pursue it, a self-starting attitude is key.

“Women need to arm themselves with knowledge by, for example, learning about private equity from whichever source available,” said Wanjihia.

Both the EAVCA and SAVCA host regular networking events targeting women, for those either seeking funding or involved in the private equity industry already. Van der Merwe says that the SAVCA events are increasingly well-attended.

Thus, while the issue of encouraging entrepreneurship requires effort on a number of fronts, its benefits underscore a clear message: women can and should be a major part of the African powerhouse. It’s just a matter of getting there.