Women entrepreneurs confront a $42 billion gender funding gap while owning 58% of Africa’s SMEs and contributing $300 billion to the continent’s GDP. If the gap is closed, their contribution can more than double.

In the streets of Douala, Onitsha, Dar es Salaam, Cape Town and across major African cities, it is very common to come across businesses owned and operated by women — they are a visible part of the economy. According to the Global Entrepreneurship Monitor (GEM), one in every four African women starts or manages her own business. Sub-Saharan Africa has the world’s highest rate of female entrepreneurship, at 27% but they are mostly small and medium enterprises (SMEs) with limited growth potential.

These businesses are spread throughout several sectors, offering a wide range of products and services. They contribute a bulk of their earnings (90%) to catering to the well-being of their families and communities. They also contribute $250 billion to $300 billion to African economic growth (13% of the continent’s GDP). The importance and contributions of female entrepreneurs to the African economy cannot be overstated.

Notwithstanding, one cannot help but wonder why Africa has a $42 billion gender finance gap, as revealed by AfDB in 2021. Globally, the International Finance Corporation (IFC) estimates a $300 billion gender finance gap, with more than 70% of women-owned small and medium-sized businesses having insufficient or no access to financial services. Aside from business funding, WSMEs are the most financially excluded group in Africa, with just 37% of women having and owning bank accounts.

The gender finance gap goes beyond availability or affordability, but also WSMEs’ willingness and capacity to access financing options. An IMF research of 47 African nations found that women are more prone to opt-out of loan offers due to low perceived creditworthiness. 

While women-owned and women-led enterprises now benefit the African economy, there is still a lot more potential to be realized. According to a McKinsey report on the power of parity in Africa, bridging the gender financing gap could double the contribution of WSMEs to GDP by 2025. 

It is crucial that all stakeholders (government, banks, investors, development partners, etc.) offer the necessary support to promote and protect women entrepreneurs and address the challenges that prevent their businesses from succeeding. We can develop a gender-inclusive economy in Africa with the relevant laws and interventions, unleashing women entrepreneurs. This provides us with a chance to enhance economic growth while also lifting millions of people out of poverty.

Understanding these challenges, Creative Space Startups in partnership with  Sociocapital, The Learning Gate and WETECH with support funding from AFAWA (Affirmative Finance Action for Women in Africa) designed Growth4Her an accelerator program targeted at building the capacity of women-led small and medium enterprises (WSMEs) to enable them to transition to high potential fundable growth stage businesses. 

For her first cohorts, Growth4Her is currently accepting applications from women entrepreneurs to develop their capacity, equipping them with the relevant resources to build sustainable and productive businesses. 

To apply click here.

Despite owning 58% of Africa’s SMEs, women face a $42 billion gender financing gap, impeding their ability to scale up, advance professionally as business leaders, and compete globally.

WOMEN ARE THE BACKBONE OF THE AFRICAN ECONOMY — According to a recent World Bank research, women entrepreneurs are an important and thriving source of economic growth in Sub-Saharan Africa. However, women-owned businesses get lower monetary returns (profit or investment funding) compared to men-owned businesses owing to gender-specific restrictions. In recent times, there has been an increase in women-centric training programs, yet this hasn’t translated to an equivalent rise in financing. This imbalance implies women entrepreneurs may be overtrained, and underfunded. Therefore, it is critical that in supporting women entrepreneurs, we provide an enabling environment that ensures a balance of both capacity and resources relevant for growth.

During a closed virtual launch, Grace Oluchi, Cofounder and Executive Director of Creative Space Startups asked, “What if we all intentionally supported women entrepreneurs?”. This intentionality begins with Growth4Her, a women accelerator program created by Creative Space Startups in partnership with Sociocapital Impact Group, The Learning Gate and WETECH. G4Her seeks to bridge the gender financing gap in Africa by providing women entrepreneurs with the capacity and tools which enables them to transition from small to high potential fundable growth stage businesses.

During a closed virtual launch, Grace Oluchi, Cofounder and Executive Director of Creative Space Startups asked, “What if we all intentionally supported women entrepreneurs?”. This intentionality begins with Growth4Her, a women accelerator program created by Creative Space Startups in partnership with Sociocapital Impact Group, The Learning Gate and WETECH. G4Her seeks to bridge the gender financing gap in Africa by providing women entrepreneurs with the capacity and tools which enables them to transition from small to high potential fundable growth stage businesses.

The program offers a robust support system for women entrepreneurs; “The G4Her consortium brings the best of business and development, equipping beneficiaries with the perspective and tools to leverage the opportunity from a diverse investment cluster. Women-led enterprises must be adaptive to the African market’s rapid volatility and uncertainty. The G4Her program will deliver a balanced coaching and mentorship program, including psychosocial support required for them to survive and thrive”. Sharon Madaki, Executive Director, Sociocapital.

Over the next 5 years, this program aims to empower 1500 women entrepreneurs across 10 African cities with a particular interest in women-led Small and Medium Enterprises (WSMEs) in West and Central Africa. The program offers beneficiaries investment readiness skills, links them directly to funders, and fosters an ecosystem that supports Women’s SMEs.

“Investment readiness is a nursery bed prepared for investors to plant, water and nurture their seeds,” says Ajuma Ataguba, Principal Consultant for The Learning Gate. Our approach is to see women receive the skills, resources and direct access to funders and new markets. We guide them through interaction with funders to ensure higher success rates. The program’s four pillars include capacity building, public policy co-creation, psychosocial support and investment readiness training.

With support funding from AFAWA (Affirmative Finance Action for Women in Africa), Growth4Her will be piloted in Cameroon and Nigeria and looks forward to onboarding 30-50 women entrepreneurs for its first cohort. Through this sub-economic region collaboration, hopes are high as the program is expected to increase collaborations between neighbouring Cameroon and the Nigerian entrepreneurship ecosystem. Taking advantage of initiatives like the African Continental Free Trade Area (AfCFTA) and other intra-African policies and programs to increase cross-border women collaboration and economic growth.

The program is being implemented in Nigeria by Creative Space Startups and in Cameroon by WETECH; speaking on the program’s goals, Elodie Nonga-Kenla, Founder of WETECH stated “We want to ensure that women in (Africa) Cameroon become more confident, heard, encouraged, and supported in their entrepreneurial journey. The program is a great opportunity for women entrepreneurs in the economic region to build their ability to scale on both a continental and global level”.