JONATHAN COOK: Simple tools can help African women expand their entrepreneurial prowess
Unlocking the potential of these business owners will boost GDP and create employment
Africa is the only region in the world where more women than men choose to become entrepreneurs. That should be good news — women are more likely to spend profits on food and family.
But many women begin micro enterprises just to survive. Three-quarters of self-employed women in SA have no employees, while nearly half of self-employed men have at least one employee. So one boost for employment would be to help women in subsistence businesses to expand.
Women face extra barriers as entrepreneurs. Profits of female-owned enterprises across Africa are on average 38% lower than those of male-owned enterprises. In SA too, women-owned businesses tend to be smaller, have lower revenues and employ fewer people.
A World Bank survey across 10 African countries found that male-owned businesses have on average six times more capital than women-owned businesses. Reasons include ownership of property to use as collateral and customs or laws that, for example, require a woman to obtain her husband’s permission to take out a loan or open a bank account. He may then decide to spend the money himself. In some countries there are explicit restrictions on what women may do — such as driving a car.
What’s holding women back in SA, where laws prohibit gender discrimination? Many of us, men and women, still have an unconscious gender bias that expects to see men at work and women at home. Behaviour we see as admirably assertive in men, we may label as inappropriate aggression in women. Some men may still think women belong at home looking after the children, and so prefer to deal with men as suppliers. Women may also have to spend more time than men on home and family. Educational opportunities tend to favour males.
None of the bias is justified, of course. The Kauffman Foundation found that an increase of women participation in business leadership is associated with better financial returns. Women are more likely to persist as serial entrepreneurs and have a more nuanced (neither too low nor too high) approach to risk.
So what can we do? Providing information, business tools and encouragement, combined with legislated fairness and supply-chain equity, can all help, together with continuing education about gender roles and pressure on social norms. And we can match opportunities to the circumstances of women. For example, we find that women benefit more from learning material provided flexibly online and in short workshops they can fit around their other obligations.
Sometimes the simplest exposure can make a huge difference. In Egypt, we worked with 2,853 entrepreneurs, mostly women, with limited education and no previous business training. We identified three key areas where women entrepreneurs lacked information: digital financial services; financial products and services; and business growth strategies. For example, clothing retailer Hayam Hussein discovered digital payments for the first time and began collecting payments via Vodafone Cash. A new world of opportunity was opened. Such a simple solution, yet so powerful.
Applying practical tools also boosts confidence. Things were not going well for Rebecca Logli’s hardware business in northern Kenya. But as part of a programme, she was given tools to survey customers.
“Before the programme, I was afraid of interacting with my customers and would stay at the back of the shop to avoid speaking to clients. Using the survey tools, I started to ask my customers what types of materials they were interested in purchasing, and this helped me to stock fast-moving items and get rid of dead stock.”
There could be few interventions with greater positive effect than liberating the power of women entrepreneurs. It would boost GDP, provide livelihoods for many more people, improve the quality of life of their families, and provide dignity and independence for women. Definitely worth doing.
• Cook, a former director of the Gordon Institute of Business Science, is chair and co-founder of the African Management Institute (AMI). Nita Harry and Irene Okoye, both colleagues at AMI, shared in preparing this column.