Investing in women is Smart Business, But we have to do it Right

Women entrepreneurship is a topic whose time has arrived in Africa and indeed for the whole world – that one plus understanding what actually helps them start, build and scale/grow businesses.

Let’s face it, the entrepreneurial space has always been hostile for women, with less than one in 10 venture capital dollars going to companies with female founders. This is despite studies indicating women make a higher return on investment. Additionally, banks and other financial institutions find women riskier to loan than men.

For these reasons and many others, men have always been near twice as likely to start businesses as their female counterparts. In the USA, for example, according to an article published on Huffington Post, only 36 percent of all businesses in the United States in 2016 were owned by women.

Sadly, with decades of progress toward making women equal partners with men in the economy and society and the existence of many mechanisms set in place in developing countries to help women thrive in business, there still exist many barriers to their success – and most women-owned enterprises are in low-profitability and/or low-growth sectors.

In Kenya, for example, the majority of women in business run ‘mama mboga’ kiosks, retail shops, beauty parlors, and food services among other sectors most refer as feminine. “They are rarely in mining, construction, electronics and software,” says Caren Grown, a Senior Director for Gender at the World Bank.

However, if women are supported and empowered to participate in the global economic growth, by supporting their ventures, not just in some but in all sectors, global GDPs will grow and the global economy will benefit.

A McKinsey Global Institute study found that if women – who account for half the world’s working-age population – are supported to achieve their full economic potential, and play “an identical role in labor markets,” $28 trillion would be added to the global economy by 2025, an increase of 26 percent.

Thus said, to support women-led initiatives, programs such as the Graça Machel Trust backed Invest2Impact investing in women enterprises need to be launched and made available for all. Another good example is the Imperial College London’s WE Innovate – a program that has backed hundreds of female student entrepreneurs with mentorship, start-up contests and exposure to investor networks. Locally, Standard Chartered Bank and @iBizAfrica, Strathmore University partnered to create the Standard Chartered Women in Tech Incubator – a program that supports female-led entrepreneurial teams by providing them with training, mentorship and seed funding.

Evaluation for such programs and data to show their success and shortcomings also need to be done in order to enhance their usefulness.

Training women on personal initiative skills, exposure to male-dominated sectors and improving mentorship opportunities from men – including introductions to new markets – is important to encourage women entrepreneurs.

Publications like Inversk and other media outlets also have a role to play – by sharing and amplifying stories and initiatives from women – to encourage them to do more and as well encourage others to take the bold move to join the course.

Additionally, event organizers need tap into female entrepreneurs by providing networking and exposure opportunities. This can be done by giving them speaking engagements.

As Inversk publishes the first-ever issue on Women in Business, we officially enter into space in doing more to promote women in their initiatives and help the global economy while enhancing gender equality in all spheres. We do hope to do more and better in the future; not just in our publications but also in our events.