Navigating Hurdles on the Path to Capital: African Women Entrepreneurs’ Journey

There is a common refrain that rings out across the hills in interactions with African entrepreneurs. It is a phrase so regularly raised it sounds like a broken record. African businesses struggle to access and raise capital.

Where a group of friends, family, and angel investors that see commercial potential in an idea could have filled that funding gap, most entrepreneurs are left with no option but to seek a loan from commercial banks, at such prohibitive rates it is nearly suicidal for a fledgling business.

And that is where it becomes especially complicated for women entrepreneurs. Banks and the other credit sources will require collateral in the form of physical assets, usually real estate, or proof of gainful employment with reputable institutions before they can open the doors to the high cost capital.

Many women though will not have assets to their names as any property they are associated with will be registered either in the names of their community or the men in their families. This slams the doors of commercial banks shut right in the face of women entrepreneurs. It is a chain that shackles the legs of Africa’s women entrepreneurs and holds them back.

African women, however, wake up each day to defy these odds. Several researchers have found that the countries with the highest number of women entrepreneurs are in Africa, with Ghana, Cape Verde, and Rwanda leading the pack. Researchers estimate that women-led businesses contribute nearly 15% of GDP in Africa’s nearly $4 trillion economy.

Women entrepreneurs who have weathered these challenges to build successful businesses, creating jobs in the process and transforming their communities highlight a missed opportunity in the structural hurdles to accessing capital. Women entrepreneurs are active disruptors in fashion, the arts and entertainment, computer technology, engineering, education, healthcare, logistics and supply chain management, and agriculture. These businesses are stories of courage, determination, and success in the face of adversity.

Hurdles to women-led businesses accessing capital are not only a bottleneck to business growth but are also a missed opportunity for investors. Women entrepreneurs bring on board a unique grounding within their communities and an acute awareness of challenges that can be solved by business opportunities. Ignoring women-led businesses is walking away from opportunities that could open doors to untapped markets and closing the door to the opportunity to work with tried and tested business partners with a track record of overcoming steep odds.