About seven years ago, the United Nations introduced the concept of gender-aware economics and transformative financing. The idea is that funds and other investment vehicles become aware of what they are investing in, taking the time to consider different assets and businesses with a focus on financing women entrepreneurs.
In a country with a 35% unemployment rate, financing women entrepreneurs has never been more relevant. The South African Women Entrepreneurs Job Creators Survey shows women actively gravitate towards industries that work to solve job creation. In fact, employment creation is one of their key motivating factors, with 90% of South Africa’s female entrepreneurs saying it was either “very important” (74%) or an “important” (16%) consideration when they started their business. And women were not just talking about it, their plans were concrete.
Mastercard’s Index of Women Entrepreneurs tells us that South Africa is one of only 12 economies where women entrepreneur numbers are growing. However, while South Africa moved up one place from 2020 to rank 37th in 2021, with a score of 54.9, women’s advancement remains hampered by less supportive entrepreneurial conditions compared with other global economies, such as the US. South Africa ranks 37th in the supporting entrepreneurial conditions component of the Index, which benchmarks how supportive entrepreneurial conditions are as enablers or constraints of women’s business ownership.
This highlights the huge potential for further growth, both for employment numbers and the economy, if funders start looking at investments through a gender-friendly lens. And the contribution would not be insignificant. Although women comprise only 19,4% of business owners, women-owned businesses established between 2018 and 2022 were expected to generate as much as R175-billion a year and create 972 000 jobs. The Covid-19 pandemic would obviously have had a massive impact on these projections but the potential for growth is unmistakable.
Women are nothing if not creative, and their ability to multitask and balance the responsibilities of the home and the workplace means that they are superbly equipped to take on the challenges of entrepreneurship and job creation.
As a woman leader, I experienced many challenges while trying to break through the glass ceiling and there have been many moments where I have had to draw on my inner strength and my personal support network to persevere.
All of this means that, as a woman at the top, I am extremely passionate when it comes to the topic of encouraging investment in women entrepreneurs. Increasing funding opportunities for women-owned businesses would be a win-win for South Africa as a whole, particularly when you consider that so many households are headed by females.
There are several key actions that businesses and funders alike can take to make finance more accessible for women entrepreneurs:
Buy products and services from women-owned businesses
Larger companies can review their procurement policies and prioritise women-owned businesses as suppliers. This shouldn’t be limited to sourcing business from the women-owned businesses already on your books but can include doing research to find out which women-led businesses offer the services or goods you are looking for.
Put pressure on financial institutions
If there are more voices holding financial institutions accountable, and asking the relevant questions, they will take more cognisance of the importance of supporting women entrepreneurs.
Lead by example
Talking about encouraging women entrepreneurs and gender equality is easy; leading by example is the strongest statement.
Products and services developed for women entrepreneurs should offer clear benefits over the other products available in the market. Nuanced details can give rise to products that have been developed to help women entrepreneurs showcase their strengths.
Improving financial literacy
As a financial leader, this is a topic particularly close to my heart. Improving financial literacy, and empowering more women to lead from the front, will hasten the growth of the entrepreneurial mindset. From knowing the difference between saving and investing, to being able to build a business plan and working out a company’s financials, the path to business success lies in improving financial literacy from the bottom up.
Push for tertiary education access
South African business schools report that the percentage of women MBA students has increased radically in the past five years – in some cases by as much as 10%. However, many maintain that their representation has remained fairly stable, hovering around the 25% to 30% mark. Schools that offer both full-time and part-time MBAs report a slightly higher percentage of women on the full-time programme.
The long and short of it is that there are countless opportunities to empower women entrepreneurs and access to finance is one of the most crucial of those.
Jeanette Marais is the deputy chief executive of Momentum Metropolitan Holdings