Bank’s programme gives women entrepreneurs a leg up in Africa and Middle East
Tech startups are given a platform to grow their business and support their aspirations
Mobilising support for female entrepreneurs is a necessary factor in improving livelihoods and transforming the global economy. A Boston Consulting Group study concluded that if female entrepreneurs received as much support as their male counterparts the global economy could experience a boost of $5-trillion.
However, the sobering reality is that not enough is being done to enable female start-ups to thrive. According to the World Economic Forum’s (WEF’s) 2020 Gender Gap Report women’s economic empowerment is actually worsening, estimating that closing the gender gap in economic participation and opportunity is now 257 years away. This is 55 years longer than what was reported in 2019.
Africa is the only region globally where more women choose to become entrepreneurs than men. However, despite this startling statistic, nowhere near enough is being done to support these women, who are determined to establish successful companies. Many face significant obstacles and structural inequalities, with more than half of female entrepreneurs citing a lack of financing and limited access to technology in preventing them to scale their businesses.
Small businesses already have a hard time securing financing, but this funding gap is more pronounced regarding female entrepreneurs. The African Development Bank estimates a $42bn funding gap for women entrepreneurs across the African continent. This gap exists at various levels of entrepreneurial funding — including bank loans, angel investment, venture capital and private equity — despite there being more female entrepreneurs in Sub-Saharan Africa than men.
The WEF gender gap report states that women cite lack of access to finance as the largest obstacle to entrepreneurship, by far. Regarding tech start-ups, only 2% of $725.6m in venture capital funding was invested in women-owned (or led) businesses in Sub-Saharan Africa throughout 2018. This is astounding when research has shown that if female-led businesses are supported, be it through mentoring or financial support, they outperform their male counterparts, achieving higher revenues and offering a 35% return on investment.
Yet the issue we have witnessed with female entrepreneurs is two-fold: not enough financial support is available, and women often lack access to networks and mentorship. Time and again studies have shown that having access to a strong network is a critical element in the long-term success of female-led businesses. The Harvard Business Review found that stronger and broader networks are linked to smaller gender gaps in business sustainability and improved access to a wide variety of funding sources.
We have seen a surge in start-ups that are looking to expand their businesses through e-commerce and digital channels take part in the accelerator programme
To support female entrepreneurs we must look at tackling both elements to incite real change, from empowering females to believe in their ideas through a positive network to providing them with the financial capabilities to grow a sustainable business.
At Standard Chartered we decided to tackle these inequalities head-on with our Women in Tech Programme (WiT). Running across five markets in Africa and the Middle East, WiT provides women-led startups with a platform to grow their business and support their aspirations. Since its initial launch in Kenya in 2017 we have seen continuous growth of female entrepreneurs coming through the accelerator programme, with the bank providing more than $500,000 to various programme cohorts in markets including Nigeria, Pakistan, Bahrain and the UAE.
With financial backing we provide training, mentoring and access to a wider network of other companies for these entrepreneurs. In just more than three years WiT has become one of the continent’s leading women in technology incubators, aligning with calls for more diversity in technology and providing more opportunities for women to develop entrepreneurial and leadership excellence.
We recognise that there is a growing tech ecosystem across the continent and that many startups are embracing the benefits of technology. WiT is a unique programme in that it not only addresses two of the key problems facing female entrepreneurs but also tackles the digital-gap many female-led entrepreneurs’ experience. It’s not surprising that most female entrepreneurs we encounter through the programme want or are using technology to grow their businesses.
A prime example of a digitally savvy WiT cohort member is Bismart Insurance, a web insurance aggregator based in Kenya. Channelling a solution-orientated shift to digital, Bismart was set up to address and resolve key pain points customers faced when purchasing insurance, including a lack of disclosure of essential information and the absence of a consolidated platform for insurance products. Coupled with its participation in the first WiT Kenya cohort and vision to expand into the digital insurance market, Bismart efficiently scaled its operations and experienced more than 100 purchasers by end-2017.
We have seen a surge in start-ups that are looking to expand their businesses through e-commerce and digital channels take part in the accelerator programme. The WiT programme is a demonstrated contributor to startups with promising business models, leveraging its breadth of expertise and resource to drive and scale their operations.
Chief of these startups is Chefaa, an Egyptian, AI-powered digital platform that enables chronic patients to order, schedule and refill their recurring medications regardless of location or income. Chefaa participated in the WiT Middle East and North Africa cycle in 2019 and has, to date, raised over $6m in funding and is closing an additional $2.5m in funding. Chefaa is now the second most downloaded application on the Egyptian App Store and the company has subsequently increased monthly orders by 300% since taking part in the WiT programme.
Despite unfavourable conditions, female entrepreneurs have been fighting their way to the top through increased support from international organisations, local governments and corporate sponsors. However, adjusting attitudes towards female entrepreneurs in Africa is essential and this is something that we must build on through our networks.
It is also crucial to identify and support policy changes that can facilitate the development of female-led businesses. This is where the private sector plays a vital role in providing the necessary training, mentorship, and seed funding that would otherwise be difficult to receive elsewhere. As female-led businesses provide an important flow of capital for local communities, every effort should be made to support and grow these businesses, in service of countless families and communities throughout Africa.
We should inspire girls and young women with a business dream to have the confidence to make it happen and know that they will be aided financially and socially.
• Arara-Kimani is regional head: corporate affairs and brand & marketing, at Standard Chartered.
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