Your journey this year has been inspiring—now, let’s prepare for the next chapter.

Dear Growth4Her Family,

2024 has been an exciting journey of triumphs and challenges, yet you have stood tall, embodying the true African spirit of determination and perseverance.

Your commitment to your goals is a testament to your strength and resilience. Despite the obstacles that came with the year, you have repeatedly shown up, pushing forward with a resolute belief in yourself and your enterprise.

Often, it’s easy to overlook your progress, but take a moment to acknowledge how far you’ve come. In the face of adversity, you’ve survived and thrived, making your mark across lives, platforms, and communities.

We celebrate your achievements and want you to pause and reflect on the year. Consider the challenges you’ve overcome, the lessons you’ve learned, and the milestones you’ve reached. Each step has contributed to your growth and empowered yourself and those around you. You, our friend, are a beacon of inspiration, and we are immensely proud of you and all you have accomplished!

Now, let’s picture the end of the year in bustling Douala markets or the lively streets of Lagos. The air is filled with anticipation, and the chatter of buyers and sellers’ weaves stories of hope, resilience, and dreams for the coming year. It’s a time for reflection and renewal—a moment to pause in the busyness and year-end festive preparations to ask: How far have I come, and where am I going next? 

Let’s imagine Amina, as a soap maker in Cameroon, spent this year refining her production process, finding more ingenious ways to manage costs, and even mentoring a young entrepreneur in her community. Then there’s the fashion designer from Nigeria, let’s call her Chidera, who expanded her customer base and introduced a sustainable fashion line inspired by the women she met in our Growth4Her network.  

Amina and Chidera are closing their year with gratitude for how far they’ve come and clear plans for going even further. But their journeys weren’t without challenges—there were moments of doubt, financial struggles, damning policies by the government, and the constant need to balance personal and professional life.  

As the year comes to a close, it’s time to ask yourself:  

– What worked well for me and my business this year?  

– Where did I struggle, and what lessons can I draw from those challenges?  

– How can I refine my processes, embrace new opportunities, and become a better version of myself as an entrepreneur and a woman striving to make an impact?  

Looking Ahead to a Brighter 2025  

1. Reflect on the Journey: This month, sit with your thoughts, revisit your goals, and celebrate your wins—big or small. These reflections will guide you as you set your intentions for the year ahead.  

2. Set Growth Goals: What’s one area in your business you want to optimize next year? Whether it’s financial planning, product innovation, or customer engagement, set specific, achievable targets to keep you focused.  

3. Empower Others: Just like Amina and Chidera, consider how you can help someone else on their journey. You have a story worth listening to, so share your lessons, offer a listening ear, or mentor a budding entrepreneur in your community. After all, when we lift others, we rise together.  

As we enter 2025, let’s continue demonstrating the strength, resilience, and optimism that define us as women entrepreneurs in Africa.

We’ll continue to create impact, break barriers, and build inspiring businesses.

Here’s to a new year filled with opportunities, growth, and tremendous success!

Written by: Folayemi R.Ajayi
Edited by: Olubukola Mercy A.

Running a Micro, Small, and Medium Enterprise (MSME) presents considerable challenges for African female entrepreneurs, where various cultural, financial, and operational obstacles create a complex environment. Despite being called the “backbone of the African economy,” women entrepreneurs face significant hurdles. According to the Women In Africa philanthropy report (2020), female entrepreneurship contributes an estimated 7–9% to the continent’s GDP, translating to roughly $150–200 billion. Access to financial resources remains a critical issue; women in sub-Saharan Africa are 20% less likely than men to hold a bank account and 17% less likely to obtain formal credit. 

As Kede Ndouna and Tsafack Nanfosso (2017) noted, the situation for women in rural areas across Africa can be pretty harsh. In countries like Nigeria and Cameroon, entrepreneurship revolves around low-wage, informal activities, which typically yield limited productivity and lack social protection. With few livelihood options available, many women are stuck in low-output ventures where business and household responsibilities often overlap. This dual burden stifles their potential and leaves their entrepreneurial talents unrecognized.

Financial literacy and effective money management are essential to breaking through these barriers. Women who master these skills are better positioned to navigate the competitive landscape and transform their businesses into sustainable, thriving enterprises. Understanding budgeting, saving, and investing can distinguish those who merely survive from those who excel.

Given these challenges, we have curated a comprehensive set of money management tips for African female entrepreneurs. These practical strategies empower women to tackle financial hurdles confidently, enhancing their ability to sustain and grow their MSMEs. Women can unlock new opportunities by investing in their financial education, paving the way for a more inclusive and dynamic entrepreneurial ecosystem across Africa.

1. Separate Personal and Business Finances

Blurring the lines between personal and business finances can lead to tax complications and difficulty tracking the business’s financial health. One of the first steps in effective money management is separating your personal and business finances; separating your personal and business financials leads to clarity, mismanagement, and even financial ruin for your business. Open a dedicated business bank account and ensure all business-related transactions—income or expenses—flow through this account.

It matters because separating finances allows for better tracking of business performance, more precise cash flow management, and easier tax preparation. It also helps you understand whether your business is genuinely profitable.

2. Budget and Plan Regularly

Creating a detailed budget for your business is essential for controlling spending and managing cash flow. A budget will help you track income, expenses, and profits, providing a roadmap to keep you on course with your financial goals. As an MSME owner in Africa, unexpected costs such as fluctuating electricity prices, transportation, or inflation can impact your business, so budgeting helps you anticipate and prepare for these challenges.

• Pro Tip: Revise your budget monthly or quarterly based on actual business performance. This will allow you to adjust for external factors like economic conditions or changes in customer demand.

3. Maintain a Cash Flow Forecast

Cash flow is the lifeblood of any business, and for MSMEs, poor cash flow management is often a significant reason for failure. A cash flow forecast helps you predict when money will come into your business and when it will go out. This ensures you can meet your financial obligations, such as paying suppliers, employees, and yourself.

• Tip for women entrepreneurs: Cash flow forecasting is especially crucial if you juggle multiple responsibilities, such as running your household alongside your business. It helps avoid surprises and ensures you can effectively balance personal and business needs.

4. Leverage Mobile Money Platforms

Africa is a leader in mobile financial services, and MSME owners should take full advantage of this technology. Mobile money platforms like M-Pesa, Smobilpay, MoMo, or Orange Money are more than just payment solutions—they allow you to manage your finances in real-time, even if you are running your business from rural areas where traditional banking is not easily accessible.

• Key Benefit: These platforms are convenient for sending and receiving payments and enable you to save and access credit. Mobile money provides financial inclusion for women facing challenges accessing formal financial institutions.

5. Embrace Small, Low-Interest Loans

Many female entrepreneurs hesitate to take out loans because they fear debt. However, when used responsibly, loans can provide the capital needed for business expansion, inventory purchases, or operational improvements. Many African governments, NGOs, and financial institutions offer low-interest loans for women entrepreneurs (Growth4her).

• Tip: Only borrow what you need and have a clear plan for using and repaying the loan. Avoid borrowing for day-to-day expenses, such as Electricity, fuelling, transportation, etc. (Operational Expenditure); instead, use loans to invest in assets (Capital Expenditure) that will generate income for your business.

6. Invest in Financial Literacy

Financial literacy is a powerful tool for any entrepreneur, especially for women who face unique challenges in the business environment. Understanding the basics of accounting, taxes, and financial statements will help you make informed decisions and avoid pitfalls. If you need clarification on economic management, consider partnering with a financial advisor or attending workshops that teach basic finance principles tailored to African MSMEs (Growth4Her).

• Why it matters: Many women-owned businesses fail because their owners need to gain basic financial management knowledge. Taking the time to learn financial management can transform your business from surviving to thriving.

7. Build a Safety Net (Emergency Fund)

Every MSME owner should have a financial safety net to deal with emergencies, such as unexpected expenses, equipment breakdowns, or a sudden drop in sales. Setting aside some of your profits into an emergency fund will protect your business from unforeseen challenges that could otherwise cause significant setbacks. This is especially true in Africa, where there are so many business-crippling policies/laws put in place by the various heads of government.

• Women entrepreneurs’ perspective: This is especially important for women, as societal pressures may often force them to dip into business funds for family or personal emergencies. A dedicated business emergency fund ensures you can handle unexpected business costs without destabilizing your operations.

8. Monitor Your Debt Levels

Debt is a tool that, if managed well, can fuel business growth. However, uncontrolled debt can quickly spiral out of control and threaten the survival of your MSME. Be careful not to overburden your business with debt. Always review the terms of any loans and ensure your business can meet the repayment schedule comfortably.

• Tip: If your current financial situation is stretched, prioritize paying off high-interest debt first and avoid taking on additional loans.

9. Invest in Your Business’s Future

Reinvesting profits back into your business is vital to long-term growth. Whether purchasing better equipment, expanding your product line, or improving marketing, investing strategically in your business will help it grow. Don’t be tempted to spend all your profits on personal luxuries or non-essential items.

• Why this matters: Many businesses remain small because owners need to reinvest profits. As the company grows, so do expenses, and the habit of not reinvesting profits will begin to thin out your earnings, and you will begin to record fewer profits compared to previous periods.

10. Embrace Technology for Financial Management

Technology has indeed been a great help to humanity and businesses. The advent of technology has given rise to cloud-based accounting solutions. Gone are the days when you would need an expensive server machine to power your business activities financially. With accounting software like QuickBooks, Wave, or Zoho Books, you can easily track your business finances and generate reports.

•       Why this matters: This accounting software are tools that can easily give you an overview of your business health and help you make informed financial decisions.

11. Build Financial Literacy: Many successful entrepreneurs started with little to no accounting knowledge, but by improving their understanding of business and finance, they could scale up their business operations. Attend workshops, read books, consult financial experts, attend finance and business classes, and even get an MBA!

•       Why this matters: A strong understanding of accounting terms and concepts (e.g., Debit, Credit, Cash basis, Accrual basis, etc.) will make it easier to interpret the financial reports and help avoid costly mistakes.

12. Take Advantage of Government and NGO Programs: The government and well-meaning organizations have risen to the task of empowering women in business through aids, knowledge, and skills that will help them scale their businesses. Programs like the Growth4Her women accelerator are an intervention of the AFDB implemented by Creative Space Startups to help women business owners become investment-ready.  Growth4Her supports and empowers women entrepreneurs, providing them with the capacity and tools to transition from small to high-potential, fundable growth-stage businesses. The program equips beneficiaries with investment readiness skills, connects them directly to funders, and cultivates an ecosystem that supports their businesses.  Recently, in Cameroon, the inaugural National Women’s Entrepreneurship Expo (Snef) was held in June to elevate women’s roles in Cameroon’s economic fabric. Organized by the Federation of Women Entrepreneurs Associations of Cameroon (Fasfecam) and co-sponsored by the Ministry of SMEs, Social Economy, and Handicrafts, alongside the Ministry of Women’s Empowerment and Family, the expo also receives support from the Cameroon Chamber of Commerce.

Many African governments, NGOs, and banks offer grants, loans, or training programs for women-owned MSMEs. Research and stay updated through government announcements and industry publications, as well as engage with business communities to get information on programs and grants you can plug into. Growth4Her will keep you updated through our newsletters; sign up and stay tuned. Use these programs for financial support and business advice. Applications are currently open for the 4th cohort of the Growth4Her Accelerator Women Program for Nigerian female entrepreneurs only, apply before the November 22, 2024- https://growth4her.org/growth4her-cohort-4-call-for-applications-for-women-led-smes-in-nigeria/

Conclusion

As a female African MSME owner, understanding and practicing effective money management will help you grow and sustain your business. By separating your finances, budgeting, monitoring cash flow, using mobile technology, and investing in financial literacy, you can overcome financial hurdles and build a thriving enterprise. Managing your business’s money wisely is a decisive step toward long-term success and economic independence.

References:

Kede Ndouna F. et Tsafack Nanfosso R. (2017), « Contraintes environnementales et entrepreneuriat informel au Cameroun », Revue africaine de management – African management review, vol. 2, n°1, pp.68-86

https://www.businessincameroon.com/public-management/0706-13916-cameroon-hosts-inaugural-womens-entrepreneurship-expo-to-boost-economic-role

Roland Berger, Women in Africa Philanthropy, Entrepreneurship study, “Women in Africa: plongée au cœur de la ruche entrepreneuriale,” 2018

https://hellofuture.orange.com/en/entrepreneurship-a-real-challenge-for-women-in-sub-saharan-africa/

https://aaeafrica.org/cameroon/identifying-the-importance-of-group-organisation-for-financing-women-entrepreneurs-in-rural-areas-a-case-study-of-the-mokolo-women-and-family-promotion-centre-in-cameroon/

https://onafriq.com/view/cameroon-based-fintech-maviance-plc

When you think about an upcoming Trade fair, what thoughts come to mind? Do you view it simply as an opportunity to register and pay for booths to drive sales and profits? What other purposes do trade fairs and exhibition shows serve beyond sales? And how do organizers measure success for these events?

Trade fairs or exhibitions are events where businesses from a specific industry showcase their products, services, or innovations to potential buyers, partners, and other stakeholders. They have been essential to business development, offering a unique blend of promotion, networking, and market research. Whether you’re a startup or a well-established company, the benefits of participating in these events can be far-reaching.

Exhibiting at trade fairs requires significant investment—both in terms of time and money—the benefits typically outweigh the costs. Recently, the Naija Brand Chick Fair has expanded its reach beyond Nigeria. The trade fair has been quite successful in the Nigerian market, but it has dared to explore new opportunities for vendors and business owners in the international market. However, this moves evoked mixed reactions, inspiring this post on the different perspectives on Trade Fairs, especially for business owners. Some opined that it’s unwise to make such a significant financial investment in exhibiting goods outside the country, considering the country’s current economic situation, as some of those products are already widely available in the London market, which may result in low sales at the fair. On the other hand, some believe it’s an excellent opportunity to increase brand visibility and positioning.

When carefully aligned with business goals, trade fairs offer more than just a return on investment; they help build relationships, boost brand awareness, and provide market insights that fuel long-term growth.

Sales are undoubtedly a significant outcome of trade fairs; the benefits often extend far beyond. Trade Fairs and Exhibitions events serve as powerful platforms for:

Brand Visibility and Awareness: Exhibiting at a trade fair can significantly boost your brand’s visibility among target audiences. By showcasing your products or services in a focused environment, you can reach potential customers who have yet to learn about your business.

Networking and Relationship Building: Trade fairs provide excellent opportunities to connect with industry peers, potential partners, and customers. Networking can lead to new collaborations, partnerships, and valuable insights into market trends.

Market Research and Analysis: Observing competitor activities and gathering feedback from attendees can provide valuable market intelligence. This information can help you refine your business strategies and identify emerging trends.

Employee Motivation and Development: Participating in trade fairs can be a motivating experience for your team. It allows them to showcase their work, learn from industry experts, and gain valuable experience.

The recent expansion of the Naija Brand Chick Fair to international shores is a testament to trade fairs’ potential to drive business growth. Despite concerns about market saturation, the event proved successful, demonstrating value beyond immediate sales.

While participating in trade fairs can be a significant investment, the long-term benefits often outweigh the costs. By carefully considering your goals, target audience, and the fair’s value proposition, you can make informed decisions and maximize your return on investment.

Participating in trade fairs and exhibitions is about more than just immediate sales. It’s a strategic move that can enhance your brand visibility and foster new relationships, collaborations, and partnerships. These long-term benefits can be invaluable for your business growth, reassuring you that your investment in trade fairs is a sound decision.

Are you considering participating in a trade fair or exhibition soon? Your next event could be the game-changer that transforms your business from local to global success.

On July 23rd, 2024, The Central Bank of Nigeria (CBN) again announced a hike in the Monetary Policy Rate (MPR) from 26.25% to 26.75% to curb the country’s increasing inflation rate.

The move, though not a bad one, poses significant challenges for businesses already grappling with many economic hurdles. However, it’s important to note that SMEs have shown remarkable resilience in the face of such challenges, inspiring hope for the future.

Understanding the Monetary Policy and Impacts on SMES

A Monetary Policy Rate (MPR) of 26.75% means that a country’s central bank has set the interest rate at which commercial banks borrow it at 26.75% per annum.

In simple terms, this means the central bank lends money to commercial banks at an interest rate of 26.75%. Commercial banks then lend this money to their customers (individuals and businesses) at a higher interest rate, making borrowing money more expensive. This move attempts to control inflation by reducing consumption and demand for goods and services, furthering the decline in consumer buying ability and dwindling sales for business owners, including SMEs. 

This new development has faced much backlash from the entrepreneurial community, like NACCIMA and NECA, pointing out the ripple effect of policies like this on business owners. At the same time, the CBN, in its defence, highlighted the potential benefits of its interest rate hikes, such as the 234% year-on-year increase in capital importation to $5.92 billion in the first half of the year, H1’24, and the 62% year-on-year increase in Diaspora Remittances to $2.43 billion in H1’24. These figures, along with the rise in external reserves to $37. 05 billion, provide a sense of reassurance and optimism.

An increased interest rate directly translates to higher borrowing costs for businesses. SMEs, which rely heavily on loans for expansion, working capital, and investment, are particularly vulnerable. With rising capital costs, these businesses need help accessing funds, hindering their growth potential.

Moreover, the higher interest rate environment can lead to reduced consumer spending as individuals grapple with increased borrowing costs on personal loans and credit cards. This decline in consumer spending can adversely affect SMEs’ revenue, creating a domino effect on their operations.

What, then, is the way forward for SMEs faced with these myriad challenges?

While the challenges posed by the interest rate hike are substantial, SMEs can implement strategies to mitigate its impact. Here are some key recommendations:

Strategic Financial Management: SMEs should prioritize careful financial planning and budgeting, closely monitoring cash flow, reducing operational costs, and optimizing resource utilization.

Debt Management: SME owners must urgently review their debt obligations and explore refinancing options to secure lower interest rates potentially. They should prioritize debt repayment and avoid unnecessary borrowing.

Focus on High-Profit Areas and Diversify Revenue Streams:  Analyse product or service lines and prioritize those with higher profit margins; expanding product or service offerings will help reduce reliance on a single income source and enhance resilience during economic downturns.

Cost-Cutting Measures: Cost-saving initiatives, like streamlining operations, negotiating better supplier deals, and exploring alternative sourcing options, can help improve profitability.

Digital Transformation: Embracing technology can improve efficiency and reduce operational costs. Digital platforms can also facilitate access to new markets and customers, thereby reducing the impact of the interest rate hike on SMEs.

Government Support: SMEs should leverage government programs and initiatives to support businesses. These programs often provide financial assistance, capacity building, and market access, like the SMEDAN Sterling bank loan, which offers up to 2.5 million naira at one single interest rate. This support is crucial and should be seen as a source of encouragement for SMEs.

Strategic Partnerships and Collaborations: Collaborating with other businesses can create synergies and reduce costs. Forming strong relationships with suppliers and customers to negotiate better terms can also help. Overall, partnerships can also provide access to new markets and resources.

The CBN’s interest rate hike presents a formidable challenge for Nigerian SMEs. By adopting proactive measures and sound financial strategies, businesses can navigate these turbulent waters and emerge stronger. Government support and a conducive business environment are crucial in helping SMEs weather the storm and contribute to the nation’s economic growth.

Sources: https://punchng.com/higher-interest-rates-could-cripple-businesses-says-naccima/#google_vignette

https://www.vanguardngr.com/2024/07