According to data provider Africa: The Big Deal, in 2025, just 0.9% of African women-only founders or teams received funding through commercial lenders, with only 8% received by teams that were gender diverse. In comparison, men-only founders or teams accounted for 91% of start-up fundraising in Africa. This is despite evidence from the Boston Consulting Group’s research, indicating that women-led start-ups generate two to two and a half times more revenue per dollar invested than those led by men. The figures were as bad for funds invested in ventures with a woman CEO. In 2025, only 2.2% of funding on the continent went to women-led firms – the lowest registered number since 2019, when Africa: The Big Deal started recording its data.
The funding shortfall for women entrepreneurs on the continent is around $42 billion, yet it is estimated that women-led businesses receive $1 in funding for every $25 raised by their male-led counterparts. In 2024, women-led start-ups raised only $48 million, compared to $2 billion by men. In addition, while women are less likely to obtain formal credit through a banking institution, if they do receive funding, it averages less than men and is more expensive.
Revolutionising the funding ecosystem
While it can be argued that women entrepreneurs do receive a lot of attention, that focus is usually on micro-enterprises and mentoring. This makes sense, given that 2025 South African research by Jeremiah Machingambi and Edward Rankhumise found that 13.5% of women between the ages of 18 and 64 are involved in entrepreneurial activity, and that 84.1% of South African women entrepreneurs are operating micro-businesses with one to five employees. However, as one woman put it, “We are overmentored and underfunded”, meaning these women are often unable to scale their businesses.
Thobile Finca, programme manager for the African Women Impact Foundation (AWIF), says, “We must stop going for the low-hanging fruit of training and mentorship. While important, at some point, when these women graduate from enterprise and supplier development (ESD) programmes, they still can’t get funding from traditional banking institutions.” This is because while, according to the Organisation for Economic Cooperation and Development, one in four businesses in Africa is started or run by women, their access to funding remains a barrier. Often, they find themselves in a complex meeting of societal expectations and gender-specific constraints, which are not easily disentangled. Constraints include not having appropriate networks or collateral to put against loans, as well as systemic biases.
However, there is a business case for building a better support ecosystem for women entrepreneurs, as they are an invaluable part of our social fabric. Their motivations for starting businesses are not driven solely by profit. Our research finds that women entrepreneurs have a more holistic outlook to entrepreneurship rooted in a desire for meaningful work, personal fulfilment, and social purpose. They want to make a difference to their communities and create employment. As such, their leadership values embrace communality and collectivism and are often spiritually inspired, with a desire to serve the common good underpinned by a spirit of ubuntu. However, they are not being given the opportunities to fulfil this mandate.
To really make the funding ecosystem more inclusive, action must move beyond merely handing out grant funding to include policies that inform the work and keep the agenda at the table. Finca says, “A lot of women’s economic empowerment looks to develop and grow small and medium enterprises (SMEs) directly, but there is a gap. The reason is that these programmes are not really changing the ecosystem within which these women are operating. These women are struggling because they are not receiving funding. You cannot keep creating programmes that will provide them with technical assistance, or grant funding. They really need money to scale and grow and that is where the bottleneck is.”
That is why the African Women Impact Fund was launched by a group of senior African women leaders. Its founders are trying to overcome the systemic barriers and investor biases in the asset management industry by enabling and promoting women-owned and women-led funds across the African continent. Incidentally, these founders are also entrepreneurs facing identical funding challenges.
AWIF aims to target the top of the funding value chain – the funders. The International Finance Corporation has found that female fund investment managers are twice as likely to invest in women-led businesses. As such, AWIF is hoping to create a ripple effect and accelerate the financial inclusion of women by providing the funders with investment capital. These women fund managers, in turn, will invest in women-led, high-impact sectors, women-led start-ups and SMEs. AWIF noted in 2025 that it was hoping to raise $1 billion by 2032 to further these goals, which offers an opportunity to businesses to support this initiative through their ESD budgets.
It starts with research
One of the major barriers to funding for women is the lack of understanding around their proficiency as business owners. Undoing the biases around women entrepreneurs needs to be prioritised. We argue that this starts with robust, empirical research, and requires a proactive response from the academic community. However, while there is a dearth of research on the “missing middle” of women entrepreneurship, existing studies are offering critical insights into what drives these women.
Some examples of research emanating from GIBS are:
- Knowledge transfer
A Postcolonial Feminist Reading of Entrepreneurial Leadership calls for African researchers to take decisive action to adopt narrative approaches, allowing women to tell their stories, so that their voices can be published in high-impact international journals. Furthermore, we argue, academic findings must be translated into actionable white papers and business case studies tailored for policymakers and corporate executives.
- Intersectionality and economic impact
Research entitled Understanding Black Women Opportunity Entrepreneurs’ Networking Behaviour: Navigating Intersectionality in South Africa’s Entrepreneurial Ecosystem notes that globally, black women entrepreneurs represent the most rapidly growing entrepreneurial group, driving growth, prosperity and social impact. While the research indicates that they display significant competence, achievement and resilience, how these women operate is largely not understood.
- Targeted policy for capital deployment
The study Women Entrepreneurs’ Opportunity Identification of Digital Platform Start-ups: Emerging Evidence from South Africa finds that women entrepreneurs are actively looking to build profitable business that solve for social problems and can become major contributors to employment in South Africa, but they need gender-specific support. The paper calls for data collection that differentiates women from other entrepreneurs, thereby enabling policymakers and the private sector to target women through strategies designed specifically around their needs. The study also calls on the private sector to improve access to funding for women entrepreneurs.
Breaking the bias
While organisations like AWIF are noteworthy in their commitment to enhance the funding ecosystem for women, they cannot do this alone. Biases against women entrepreneurs need to be broken down and new ways of looking at financing requirements must be developed to make funding accessible to business owners who do not fit the traditional mould. Financial inclusion needs to be by design. Some ideas include:
- Investors need to understand their biases, particularly an “affinity bias”. Here they are motivated to only invest in people and businesses that are familiar to them – clearly a problem when a reported 90% of venture capital and private equity partners are men.
- This drive can be accelerated with an ecosystem approach, which recognises that social change depends on a variety of stakeholders and solutions from government, the private sector, and communities, and the transformative role of education and technology.
- Financial services providers who play an important role in providing funding to women must include gender considerations in processes and initiatives from the outset, rather than add them as an afterthought.
- Regulators and policymakers must start challenging financial institutions to declare annually how much of their budget goes to women. We must drive awareness that an investment into women is not charity; it is a core business imperative designed to create a replicable model of accountability, pushing the entire financial sector to track and transparently report on gender-lens investing.
- Organisations must rethink their risk models, and financial institutions must be incentivised to prioritise women-owned businesses, and advocate for regulatory reforms that broaden access to financial services.
- The private sector needs to actively form strategic partnerships with organisations such as AWIF or Standard Bank – which has committed a $10 million investment to AWIF.
- Women entrepreneurs and business leaders must start lobbying against the inequalities in the system. They also need to reshape how they pitch for loans and funding. They can approach coaches to build confidence so that they do not undersell their businesses.
Ultimately, stakeholders need to shift mindsets from merely accommodating women to genuinely recognising and valuing their contributions, and then ensuring that they are supported in the growth of their enterprises.
KEY TAKEAWAYS
- Women are still facing entrenched institutional obstacles when it comes to financial inclusion.
- Africa’s women-led and owned businesses receive a fraction of the funding received by their male counterparts.
- Africa’s women entrepreneurs are crucial contributors to the entrepreneurship ecosystem as their motivation to start businesses is often socially motivated.
- More needs to be done to understand and support Africa’s women entrepreneurs – from increased academic research to policy and strategies that focus on these women.
- Research reinforces the notion that women are being hamstrung by a lack of funding.
- One solution is to support women-let fund managers who are twice as likely to fund women.
- Women’s contribution to the broader economy must be recognised and buoyed by supporting policies.
GIBS Prof. Caren Scheepers has been fulltime faculty since 2014 teaching on the MBA, MPhil, and open and corporate programmes. Her research focuses on the influence of context on leadership, including virtual and gendered contexts in entrepreneurship and corporations. Her expertise includes strategic leadership; organisational development; strategy implementation; executive coaching; mentoring programmes; diversity, equity, and inclusion; and women’s entrepreneurial leadership.
Prof. Kerry Chipp is an academic and researcher with extensive experience in marketing, consumer behaviour, and sustainable business practices. She holds a PhD in Marketing from KTH Stockholm and is currently serving as an assistant professor at Luleå tekniska universitet in Sweden and as adjunct professor at GIBS. Prof. Chipp has a background in both academia and professional research, with a focus on emerging markets, sustainability, and digital marketing.
