The Financing ‘Glass Ceiling’ Holding Back Women Entrepreneurs

Khadija Hashmi

Women entrepreneurs are on the rise globally, with this wave sweeping over the African and Middle Eastern region. Historically, Africa has led the world in terms of numbers of women business owners, with countries like Uganda and Ghana – leading the way. Recently the MENA region has also been taking important strides forward with Saudi Arabia being a key example where more women are engaged in entrepreneurial activity than men.

However, while this marks a positive change towards closing the gender gap in terms of entrepreneurial activity, there continues to be significant barriers to entrepreneurship opportunities and growth for women. Globally, 80% of women-owned businesses with credit needs are either unserved or underserved. This limited access to finance across Sub-Saharan Africa, and the MENA region is one of the largest gaps in the world. In addition, the Arab world has one of the lowest shares of women-owned SMEs, costing the MENA region approximately $2 trillion in lost productivity. All of which are fueled by structural conditions that are unfavourable to women, such as biases, social norms, access to technology, and laws and regulations.

While there are many women-owned businesses in terms of volume across the AME region, most of them are typically small scale, low-profit and low-risk businesses. Without capital, it is almost impossible for these businesses to achieve growth. With women representing more of the world’s unbanked population than men, this means that women entrepreneurs miss out on essential credit opportunities, savings instruments and loans for economic shocks, which are key in sustainably growing a business.

While biases and laws often take more time to change – lack of finance is where change can be implemented more quickly. With the right policies and collaboration between the private and public sector, there is a huge opportunity to unleash women entrepreneurs, accelerate overall economic growth, and lift millions out of poverty.

For instance, the Women Entrepreneurship Development Project partnership with the World Bank has provided over 19,000 loans to women entrepreneurs, including training across key business, personal and technical skills. Their partnership also introduced innovative psychometric tests as an alternative to collateral – predicting the likelihood that a woman entrepreneur will repay the loan with accuracy. In the Middle East, Abu Dhabi Investment Office’s collaboration with a private company, as part of the Women of Web3 delegation – aims to help US companies led by women entrepreneurs to expand in the UAE capital.

Banks also play a critical part in lifting participation, helping accelerate funding to fuel the sustained growth of women SMEs, and bridge the vast funding gap that exists for women entrepreneurs. They can bring basic financial services to the communities of women who are underbanked or unbanked by offering agile, low cost and convenient access that make financial management significantly easier and help with funding entrepreneurial opportunities.

Increasing access to finance to women business owners also boosts the SME eco-system, with SMEs forming the backbone of the economy, creating vast potential to create jobs and advance innovation. At Standard Chartered, our Women in Tech (WiT) programme supports women-led or women-owned small businesses globally to leverage technology in building inclusive business practices. This help provides business-development guidance to women, and access to business networks, mentorships and funding opportunities. To date, the programme has impacted over 1,287 women in tech led businesses across 7 markets in the Africa & Middle East region and given over USD1M in seed money to scale up technology led enterprises since launch in 2017.

Technology such as mobile money is also rapidly increasing access to finance for women, as financial institutions can partner with telecommunication firms to provide mobile financial services. This is helping drive financial inclusion for women across Sub-Saharan Africa including Uganda, Gabon and Kenya – however mobile phone ownership still persists to be a barrier for women in the region. Future progress depends in part on ensuring that women have access to this crucial technology.

Women are now ever-more confident, and optimistic about launching their businesses and contributing to the economy. For example, Angola is seeing over half of their working age women strongly intending to start or having already started their business as well. Women entrepreneurs across Ghana, Uganda and Angola also own over 25% of local businesses and make significant contributions to the economy.

As the adage goes, “when the tide rises, all boats rise”, a more financially inclusive society, where women are fully incorporated into the economy will unlock substantial economic growth globally by potentially $12 trillion and increase household incomes for many across the Middle East and Africa. Addressing the specific constraints facing women entrepreneurs is critical in unleashing their economic potential, and empowers women to be a force for growth – powering the path of sustainable economic recovery.

Khadija Hashmi, Head Corporate Affairs, Brand & Marketing Africa, Middle East Region and Country Head Pakistan

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