February 19

Investment for Women-Led Businesses is Missing Ingredient in African Entrepreneurship

By Pauline Koelbl

Women make up 58% of African’s self-employed population, yet there are still significant imbalances between opportunities to scale, access to funding and training between men and women-led businesses on the continent.

There is clear evidence of this in a recent World Bank report, Profiting from Parity, which shows that women entrepreneurs across sub-Saharan Africa continue to earn lower profits than men – 34% less on average.

There is an irony in these inequalities: for investors, women are, in many ways, a better bet than men. In general, women in Africa are more likely than men to choose entrepreneurship as they find themselves in situations where they need to put their natural problem-solving skills to use. In Africa, 5% of Chief Executive Officers are women – slightly higher than the global average of 4%. Moreover, research shows that technology firms led by women experience a 35% higher return on investment than those led by men.

Underwriting financial institutions

These are excellent reasons to take a look at women-led businesses and there are many social and economic benefits too, which can be measured against the UN’s SDG Goal 5.

Source: The Africa Report (link opens in a new window)

gender equality, women entrepreneurs