The African Development Bank Group notes a $42 billion financing gap for small and medium-sized enterprises owned by African women, posing a significant obstacle to economic development and overall wellbeing. Efforts by Tony Elumelu Foundation, Bank of Industry (BOI), W Initiative by Access Bank, having over 10 banks run by women, women taking ownership and creating ventures that fund women owned business, such as ARUWA and Money Africa, while laudable, is still a drop in the ocean in a Nation like ours.
Female entrepreneurs in Nigeria contribute to 50% of the Nation’s Gross Domestic Product (GDP). McKinsey Global Institute implies that this can go up to 19% in 2025 (up to 90 billion Dollars) if the systems are inclusive and equitable towards women in micro, medium small enterprises (MSMEs). But how can this happen when only 10% of commercial loans go towards women’s businesses and Nigerian women own 40% of businesses?
A survey done in 2024 by HEIR Women Hub supported by African Women Development Fund (AWDF) shows that 69% of men apply for loans than 31% of women. Our current economic climate impacts women negatively, showing that women are still under-represented in economic access and loan opportunities due to the strict process influenced by social norms. Women businesses and the gross impact of exclusivity in economic policy making in financial institutions of lending, further limits women from becoming economically independent
The African Development Bank has raised a staggering gap in the limited funding of women led business. It is essential to collaborate with the AfDB and Central Bank of Nigeria as well as lending institutions that can commit to the review of the economic injustice that women face which excludes women from economic equity and equality. Undoubtedly, financing is important for business growth and productivity, as it helps in the expansion of operations, innovation, and investment in production facilities. Yet, female business owners are less likely to receive formal financing.
Añuli Aniebo
References
-Morsy, H. (2020). Access to Finance: Why Aren’t Women Leaning In? Finance and Development, 52-53.
-World Bank (2019). Profiting from Parity: Unlocking the Potential of Women’s Business in Africa. Washington, DC: World Bank Group. http://hdl.handle.net/10986/31421.