A case for women entrepreneurs

It is often said that “investing in women is smart economics”. And we agree. According to experts, increasing access to finance, financial literacy, and building networks of African women are ways to help more women become entrepreneurs.

Regrettably, many women in Nigeria, Africa’s largest economy by GDP, are financially excluded. A 2012 survey by Enhancing Financial Inclusion and Access (EFInA) shows that 43.5 percent of Nigerian women are unbanked compared with 36.1 percent for men.

In addition to limited access to credit, just a very low percentage of women participate in the formal sector. This, coupled with certain social norms, such as women’s rights to inheriting property, restricts the role of women in the economy.

Even where there are business opportunities equally available to both women and men, women face specific problems when starting or running a business or a farm. More women participate in the informal sectors, such as agriculture and wholesale and retail trade, but their contribution is hardly captured. Nigerian women farmers produce less per hectare than their male counterparts – in the north the difference is 46 percent, while in the south it is 17 percent. This is because they lack inputs, e.g., labour, fertilizer, information, access to markets and poor education, according to World Bank report.

Addressing this problem calls for strategies that focus on equipping women. At the bottom of pyramid, for example, cooperatives, microfinance, etc will go a long way. For those at the middle of the pyramid, skill sets like an MBA which will make them more attractive to investors are likely more applicable.

Programmes for budding women entrepreneurs, for example, the five-year 10,000 women programme sponsored by Goldman Sachs, an investment bank, are essential for teaching the fundamentals of business.

On their part, women entrepreneurs have to understand financial management and embrace technology. They need to know how to run a structured business. They also need to understand that you don’t take cash from sales to pay school fees. And they need to overcome their phobia for technology because the businesses of today and tomorrow are tied to technology.

Corporate organisations keen on tapping into the significant economics and demography that women present can initiate programmes that target women by opening opportunities for them in their supply chain. There are several case studies of how companies are benefitting commercially from including women in their value chains. Big retail outlets can help women-owned micro enterprises to develop the skills to grow their business such as packaging, branding and book keeping. Because procurements don’t require collateral, such initiatives will in turn encourage banks to finance women.

However, women entrepreneurs must be cautioned. Banks will make finance accessible if they have savings, no matter how much they earn. They must know that equity is important. Banks need to see commitment. Security is important for banks.

We are convinced that there can be no inclusive growth if majority of Nigeria’s, nay, Africa’s demographic is left behind. However, for both present and future businesswomen, we cannot harp enough on the importance of getting involved, applying for programmes and grants and finding out what it takes to supply companies like MTN, Dangote, etc.