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Entrepreneurship is a proven way of supporting women in vulnerable situations, giving them access to financial freedom and improving their families’ economic prospects.
Women-owned small and medium enterprises (SMEs) equally make significant contributions to the economies in which they operate. Unfortunately, they continue to face stiff headwinds in realising their growth potential.
This is due to a number of barriers, which can be attributed to various reasons, including low financial literacy, risk aversion, social and cultural norms, as well as tendency for women-owned SMEs to be smaller in size.
Among the key constraints to women SMEs growth in Africa, is access to finance, which is considered to be one of the greatest hurdles.
On average, 30 per cent of female SME owners see their credit application dismissed by formal financial institutions following lack of “suitable collateral” (real estate collateral or cash), and another 25 per cent do not even bother to apply for a loan under the assumption that their request will be met with a firm rejection due to lack of appropriate collateral or from past experiences with unfriendly finance institution(s).
In sub-Saharan Africa, only 37 per cent of women have a bank account, compared with 48 per cent of men, a gap that has only widened recently, according to a World Bank report (2021).
The findings reflect a worse situation in North Africa, where the silent majority of the adult population remain unbanked with the gender gap for access to finance standing at 18 per cent, the largest globally.
Closer home, research says Kenyan women constitute about 52 per cent of the country’s population and about 30 per cent of the registered businesses (so far) are female-owned yet their financial inclusion remains lean.
This is mainly because women hold less than 10 per cent of the registered title deeds in the country, which makes it difficult for female-led small firms to access higher amounts of credit usually supported by a collateral (secured credit).
These striking figures have consistently posed pressing questions to policy-makers in Africa. What is it exactly that has continued to fuel gender disparity in access to finance? And why, is the gap growing even wider today more than a decade ago?
Closing the gender inequality gap, therefore, remains an economic challenge and necessity across the region, especially during the post-pandemic era.
Why must we break the barriers for women-led SMEs?
In addition to unleashing their economic contribution, women entrepreneurs establish their businesses much faster than men, yet they are held back by the barriers to funding.
Fortunately, there is hope for the Kenyan woman entrepreneur.
As a strong voice for the country’s small and medium enterprises and innovative startups, which constitute 98 per cent of the country’s businesses, Credit Bank, with other development partners, recently sought to give women-owned small businesses the resources and support they require to keep innovating, creating, and building; through the Elev8HER programme.
Women businesses can now access funding with lower collateral than banks traditionally have required. The Elev8teHER programme has differentiated products that suit businesses at any stage; young firms and established ones with a bias towards women in trade.
Financial institutions have an opportunity to make a strong contribution to communities in our country by promoting financial literacy among women engaged in small and medium enterprises.
Providing technical support to these women is, therefore, critical in ensuring they make sound business decisions hence their businesses growing exponentially.
While more deliberate efforts are required to close the gender gap and realise the potential gains of financial inclusion, educating women on how they can formalise their businesses is also crucial to narrowing the gender gap.
For this reason, initiatives such as Eleva8Her are essential in linking women entrepreneurs to networks and skills to help them grow their businesses.

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