Portugal: African women entrepreneurs face US$200bln funding shortfall – World Bank

The proportion of women among entrepreneurs in Africa is among the highest in the world, but there is a shortfall in funding for them of some $200 billion (€190 billion), according to the director of the World Bank Women Entrepreneurs Finance Initiative (We-Fi) programme, speaking at an event in Portugal.

Wendy Teleki was making a presentation at the Novafrica 2022 Conference on Economic Development, which ends on Thursday at the Nova School of Business & Economics, in Carcavelos, in the municipality of Cascais, west of Lisbon. 

Citing recent data from the Global Entrepreneurship Monitor, Teleki said that 17% of women in emerging markets are entrepreneurs and a further 35% aspire to be so. 

In other words, “half of the women in emerging markets see entrepreneurship as a way out of poverty and into prosperity,” she said – stressing that this compares very favourably with developed countries. In Africa, the level of female entrepreneurship is higher than in almost all regions of the world, whether out of necessity or opportunity, she stressed. 

For Teleki, the importance of women being entrepreneurs is that they are five to six times more likely to employ other women than if they are male entrepreneurs, so supporting women entrepreneurs helps generate employment, she said. 

In addition, women apply the money they earn in their families and communities, which promotes economic development. 

Despite these advantages, women entrepreneurs lack funding, said the We-Fi director, citing figures from the International Finance Corporation according to which there is a shortfall of $1.7 trillion in funding for women entrepreneurs, $200 billion in Africa. 

At issue, she argued, is the fact that the sectors women are involved in – namely services or trade – generate less profit and are therefore less attractive to investors. 

Another factor, she said, has to do with the lack of women in the financial sector: “If there is a woman sitting at the investor’s desk making decisions, it is twice as likely” that the investment will be approved. “But there is a huge lack [of women making decisions in finance] in Africa.” 

Teleki explained that We-Fi, which is owned by the World Bank and funded by 14 governments, works with development banks that finance projects in Africa to encourage financial institutions to develop products that serve women more effectively, but also to look at their own management structures and hiring policies, because it is known that if there are no women serving female clients, they will be less likely to get credit.