According to OECD research, Africa has the highest proportion of women entrepreneurs in the world, with more than a quarter of all businesses being started or run by women. However, when it comes to funding, African women entrepreneurs face significant challenges. Asoko Insights reveals that women founders receive less than 7% of venture capital (VC) funding on the continent, despite making up around 20% of founders, as found by Disrupt Africa.
A Global Problem
The funding disparity for female entrepreneurs is a worldwide issue. In the United States, women represented 14% of solo start-up founders in 2021 but received just 2% of VC funding. The picture is even worse in Europe, where women also account for 14% of start-up founders but receive just under 1% of total VC funding.
Lack of Female Representation Among Investors
One potential explanation for the funding disparity is the lack of female representation among investors. In sub-Saharan Africa, just 12% of senior general partners in private equity/venture capital firms are female. Globally, the number is even lower, at 11%.
Strategies for Supporting Female Entrepreneurs
Increasing the number of senior figures in VC and private equity firms is crucial for addressing gender bias among investors. Simultaneously, male investors should examine their own biases to ensure that they make more of an effort to invest in female-owned businesses. Investors can also take a more hands-on approach, extending beyond funding to help integrate female entrepreneurs into their broader networks.
Angola: Leading the Way for Women Entrepreneurs
Angola emerged as the leading country for the percentage of women owning/managing businesses with 35%, followed by Guatemala (24.9%) and Burkina Faso (21.2%). Central & East Asia has the highest rates of established business ownership for women at 6.9%, 1.3 percentage points higher than the global average of 5.6%.
Popular Industries for Women Entrepreneurs
The wholesale/retail trade industry has the most early-stage entrepreneurial activity for women globally, with 51% operating within that sector. The ICT industry saw the largest gender gap, with only 2% of women starting or owning a new business within that industry.
Sub-Saharan Africa’s High Entrepreneurship Rate
Sub-Saharan Africa has the highest entrepreneurship rate globally, with 20% of its women in their working age being entrepreneurs. Despite challenges in accessing finance, a conducive environment, and proper business incubation, women entrepreneurs continue to succeed.
Supporting Women in Tech in Kenya
The Women in Tech Incubator Program in Kenya aims to support women entrepreneurs using technology in their businesses. The program has generated revenue of Sh491 million shillings for the women in the program and raised Sh. 116 million as seed funding since its inception in 2017.
