What African Women Need to Be Successful Entrepreneurs
Private equity financing is not easy to come by, even in a market as hot as Africa. The competition for funding is fierce, and the way the numbers play out is part of the bottom line. Businesses need to demonstrate not only success to date, but a strong potential for growth, expansion, and of course exit potential.
Thus, as Erika van der Merwe, chief executive officer of the Southern African Venture Capital and Private Equity Association, explained to AFKInsider in an email interview, “The bulk of private equity funding across Africa is for established businesses with proven revenue and profitability.”
Financing women-led businesses in Africa thus presents a challenge.
While African female entrepreneurs are as avid as any other entrepreneurs on the continent, their businesses tend to stay small. IMF research finds that “women make up 40 percent of [sub-Saharan Africa’s] non-agricultural labor force, but account for nearly 50 percent of the self-employed.”
This is the highest rate in the world, and three out of the top seven countries in terms of female entrepreneurship are in Africa.
However, women only represent 25 percent of employers, a figure shared by most regions in the world. Thus, to encourage the blossoming of female-founded businesses from micro-enterprises into powerhouses would require not only access to private equity financing, but access to the tools required to build a bigger and better businesses.