The consultancy firm Roland Berger carried out, at the request of the Women in Africa (WIA) platform, its annual study on female entrepreneurship. The 2020 edition, “Accelerating the entrepreneurial dynamic of women in Africa – Improving access to finance to support the entrepreneurial dynamic”, confirms the trend: if women are the backbone of the African economy, female entrepreneurship remains an obstacle course in particular concerning access to financing.
By Laurent Benarousse *
Africa is fertile ground for female entrepreneurship: the continent has the highest rate of entrepreneurial activity in the world for women: 24% of African women entrepreneurs vs. 11% of women in South East Asia Pacific, 9% of women in the Middle East, 6% of women in Europe and Central Asia. Yet very strong disparities between men and women remain. Three main factors lie at the source of the financing difficulties of African women:
- Structural conditions unfavorable to women: a lower level of education and a lower endowment of assets.
- Difficulties in accessing financing: failure to complete the conditions for obtaining loans and self-exclusion.
- Mainly subsistence entrepreneurship: small businesses, with modest financing needs and an economic model that gives investors few guarantees of solidity.
Women’s entrepreneurship in Africa: plural realities on the continent
We have established a segmentation of countries according to the “Women entrepreneurship readiness” index which identifies four types of countries: “locomotives”, “challengers”, “next emerging” and “reborn”.
THESE FOUR GROUPS OF COUNTRIES ARE DEFINED AS FOLLOWS:
- 9 “locomotive” countries characterized by political stability, high levels of gender equality, a regulatory system promoting parity, mature financial ecosystems. South Africa, Botswana, Ghana, Kenya, Malawi, Namibia, Nigeria, Uganda and Zambia
- 4 “challenger” countries with better economic development and financial ecosystems than other African countries, but modest rates of participation of women in entrepreneurship. Algeria, Egypt, Morocco and Tunisia
- 12 “next emerging countries” defined as a group of heterogeneous and median countries regarding female entrepreneurship, due to limited access to finance and the maintenance of a high level of gender inequalities. Benin, Burundi, Cameroon, Ivory Coast, Ethiopia, Gambia, Liberia, Mozambique, Rwanda, Senegal, Sierra Leone and Tanzania
- 7 “resurgent” countries characterized by limited economic development, strong gender inequalities, high political instability, poor banking access for the populations and a poorly developed financial system. Angola, Burkina Faso, Gabon, Libya, Mali, Mauritania and Chad.
Women Entrepreneurship in Africa: Differentiations on the continent
Access to finance: a key link in entrepreneurial success
The difficulties of access to financing for African women vary according to the sources of financing and the country: if microcredit is distributed equitably among the women of the continent, the other sources of financing show significant differences between men and women.
At the source of the financing difficulties:
Women entrepreneurs in touch with cultural practices and current legislation
* Senior partner, member of the Supervisory Board, Roland Berger law firm
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