Image: iStock
South Africa is a clear leader on the continent as an enabler of women’s entrepreneurship. However, despite efforts from multiple segments of society, only 41% of South African women between the ages of 15 and 60 are regarded as economically active.
While we should celebrate the significant strides made to tackling gender disparities in entrepreneurship, we should strive as a collective to address major challenges that prevent progress, such as access to funding, says Rene Botha, regional investment manager at Business Partners Limited.
According to the most recent Mastercard Index of Women Entrepreneurs, South Africa ranks as the country in Africa with the second most women-owned businesses with formal support available for women entrepreneurs. With a score of 54.9, South Africa followed closely on the heels of Botswana, with a ranking of 56.3.
However, in every country surveyed by the Global Entrepreneurship Monitor (GEM) Women’s Entrepreneurship Report, women were less active in business than men. Countries regarded as upper-middle income territories were found to be the most progressive in terms of gender parity.
The GEM report also found that women in countries like South Africa are among the most innovative and high growth entrepreneurs in the world. Botha, who was South Africa’s Most Influential Women in Business for financial services, believes that women’s drive to succeed as businesspeople is driven by necessity.
ALSO READ: How SA women entrepreneurs can thrive against the odds
“We know that women play increasingly central roles in their households as pillars of financial support. The scarcity of jobs or inadequate compensation within those jobs presented South African women with an undeniable challenge. Many succeeded in turning that challenge into an opportunity, which they seized for the betterment of themselves, as well as their families and communities.”
Botha is an avid proponent of women empowerment who has risen through the ranks within Business Partners Limited from a junior investment professional in 1998 to area manager for Stellenbosch in 2008 and recently in 2023, regional investment manager.
In this new position, Botha has even more influence in the provision of finance to entrepreneurs and contributing to the growth of women entrepreneurship in the country. She believes that lenders must adjust their approach to women entrepreneurs and risk.
South Africa’s entrepreneurial environment presents several unique challenges for women business owners. The most critical challenge is access to finance, Botha says. According to the findings of economist and writer, Trudi Makhaya, one of the primary reasons is that women are less likely to own assets such as houses which lenders require as collateral.
Therefore, many aspiring women do not get financing due to not meeting loan eligibility requirements or simply, as many have attested, not being taken seriously enough by finance providers.
For Botha, who has led the financing of many women-owned businesses across sectors since 1998, the solution to this problem must involve lenders from across the financial spectrum, making less generalised decisions and assessing the granting of business loans on a case-by-case basis.
“Lenders, both traditional and non-traditional, have a fiduciary obligation to mitigate risk. For many, the solution is applying stringent criteria to awarding loans and other financial arrangements. However, doing so indiscriminately, has weakened South Africa’s drive towards better financial inclusion.
“As industry leaders, we must invest the time and resources into assessing each application on its individual merits and adjusting our terms to protect our own financial viability, while giving more entrepreneurs a chance to prove themselves.”
ALSO READ: Entrepreneurship for everyone
The African Development Bank Group found that many women entrepreneurs in Africa are more likely to self-select out of the credit market due to perceptions of low creditworthiness. In other words, many women opt out of applying for business finance due to their prediction that their applications will be denied.
Botha says this perception can be attributed to the historical experience of women, who traditionally found it more difficult to secure financing. It could also be attributed to cultural factors or the lack of cultural support for women entrepreneurs, an aspect that the GEM report found to be at a deficit in South Africa in particular.
Therefore, Botha says, training and education opportunities geared specifically at women will go a long way to help women develop the confidence and self-esteem they need to pursue financing options more assertively.
In addition, women must build their business networks with intention and lean on the expertise of mentors, trusted advisers and the people who show full support for their entrepreneurial ambitions.
“Women entrepreneurs are up against systemic barriers but also several cultural ones that stymie their growth on a mental and emotional level. We must streamline our efforts as leaders in the business community and within the public sector, to implement school-level and early-age interventions that can help women to overcome the fear of failure, be bolder in their decision-making and more confident in their abilities.”
Botha says in her new position as regional investment manager at Business Partners Limited, she is committed to do her part to enable female entrepreneurship in the country until the gender gap is closed.
Download our app and read this and other great stories on the move. Available for Android and iOS.
