From the Lionesses of Africa Operations Dept
The Lionesses of Africa has a user community of over 1.1 million inspirational African Female Entrepreneurs owning and running businesses from all countries of Africa, from SME’s to large multinationals, employing thousands…and across all industries. We even have an ever growing membership in the Diaspora such as the US - currently above 100,000.
All of these incredible Lionesses have two things in common.
They have been drawn to the fastest growing and largest community of African Women Entrepreneurs that is Lionesses of Africa.
All of them have what was first used by Tom Wolfe in his book about American Test Pilots who then went onto become the first Astronauts:
‘The Right Stuff’
The HoF was reminded of this having seen an Obituary this week in the New York Times. “Chuck Yeager, the most famous test pilot of his generation who was the first to break the sound barrier, and, thanks to Tom Wolfe, came to personify the death-defying aviator who possessed the elusive yet unmistakable “right stuff” died on Monday…He was 97.”
Chuck was passed over for the U.S. space program because he never went to college, but Tom Wolfe (the author of ‘The Right Stuff’) had no doubt he was the leader of those that had ‘The Right Stuff’. Indeed the next time you hear your pilot calmly asking you to assume the brace position during a flight, remember that since the 1950’s pilots have attempted to copy his calm but controlled tone when all around was in flames, and it has now become second nature in pilots and indeed great leaders. From his memoirs, Chuck said he had noted a Mach 0.965 reading on his speedometer before it jumped off the scale without a bump. “I was thunderstruck,” he wrote later, “After all the anxiety, breaking the sound barrier turned out to be a perfectly paved speedway.”
Wolfe constantly tried to discover what ‘The Right Stuff’ was that made such a person willing to strap themselves on top of a massive rocket full of the most inflammable material known to man…and then wait for the ground crew to “Light the blue touch-paper and stand back”. Was it bravery, was it madness? The death rate was one in four, yet in one particular month Chuck flew and tested 26 different aircraft including the F-104 ‘Widow-Maker’ in which he had the crash shown in the title photo. As he said in an interview: “It kinda ruined your entire day”, and yet the next day, he woke and did it all over again!
Do you not wake up as Lionesses each and every day and wonder where this drive within yourself comes from? This is without doubt ‘The Right Stuff’. Not everyone can be an entrepreneur, and as we have all found out at one time or another, in spite of our occasional thoughts of what it would be like to have the safety of a 9-5 job and a monthly pay cheque, there is something within us that drives us away from that ‘simple’ life.
For us, the thrill of our products; to design; to invent; to find new ways of doing things; to employ and watch these employees grow and mature with our business; and then to find others who believe in us, in our story, in the value and solutions our products and services bring by actually showing this through opening their wallets is so difficult to describe. Tom Wolfe said he could never get anyone to describe what ‘The Right Stuff’ actually was, and so with us it is also difficult to describe that drive that gets us up each and every morning and especially during 2020 - to go and do it again, everyday!
The business failure rate amongst entrepreneurs is also horrifying and especially amongst Women Entrepreneurs who have such extra pressures, not least from well meaning family members: “Why don’t you just settle down and get a 9-5”. In fairness, we bet that was a question asked by Chuck’s loved ones many times too!
In one of Melanie’s recent morning Blogs, she wrote:
“I often hear discussed that there are not enough women-led high growth businesses in Africa. That women are reluctant to scale. That women are risk averse. That women lack the ambition to go big. So I put these questions to a panel of successful, high growth women entrepreneurs (part of our ‘100 Lionesses’) at the recent Women and the Changing Face of Entrepreneurship in Africa Conference that we cohosted with Harvard…
…The consensus of opinion was that, although many women entrepreneurs today start out with a big dream for their businesses and with growth on their minds, the reality is very different. Often the barriers to scaling a business can be just too great, meaning that all too many women owned businesses never fulfill their growth and impact potential.”
This is a sad fact. But what are these barriers? What if you want to scale?
Given the terrible statistics on lending to SME’s and especially to women-led and owned SME’s, there are clearly some huge barriers out there.
If we look at Trade Finance (one of the most simplest of tools for increasing the efficiency of capital and controlling cash flow, and therefore for the scaling of many businesses), we find that “rejection rates for trade finance applications for SMEs in Africa are rising, with bank participation in activities decreasing. The continent’s trade finance gap, estimated to be more than US$81bn, is also growing”, according to a new report by the AfDB. A growing and systemic issue is that it has become so difficult over the past decade for traditional providers of Trade Finance (banks), to lend cost effectively to SME’s. This systemic issue has been termed the ‘Trade Finance Gap’.
What is also so sad is that much of this trade ‘gap’ will then be picked up by the big international trading companies who continue to push SME’s out of the way in their bid for global dominance, who may simply export raw materials out of the country (rather than add value within country) or is simply lost to the world because it is too small and too expensive to finance.
This report goes onto state: “In 2019, 71% of banks surveyed engaged in trade finance activities, compared with 92% in 2014.” adding the shocking statistic: “Only 40 per cent of Africa's trade is bank-intermediated, representing a far lower share than the global average of 80 per cent.”
Although it recognizes that Development Finance Institutions (‘DFI’) are doing more, the report says they tend to support more the international banks.
Yet it’s the smaller local banks that have the SME’s as customers, where development finance is needed most! So no surprise, whilst the approval rates of Trade Finance across the continent have risen by 11% over the past few years, the approval rates for SME’s have actually fallen by 20%.
It is also noted in this report that in times of crisis, banks in Africa tend to lend to larger corporations rather than riskier SME’s. Again this is not a surprise, at such tough times all banks look to ensure not only a return on investment, but a return of investment and therefore hug ever more closer the larger and safer international corporations.
So a combination of increased competition, adoption of stricter regulatory requirements requiring larger capital for certain deals (esp. in Africa) and new anti-money laundering standards have all reduced profit margins and increased operational costs making trade finance unprofitable in Africa for many banks. These increasing costs have also reduced international correspondent banks’ interest in Africa impacting local banks’ ability to trade US$. Given most of international trade is in US$, one can see why this is almost a perfect storm for the ‘Trade’ financing of SME’s.
So where does that leave us, the Lionesses of Africa community? Obviously we get up each morning and keep on trying, but Girl, is it tough out there!
Melanie continued in her blog to say: “The flip-side to this situation is that there are also many women entrepreneurs who are quite content with staying small, building a business that fits around their family life, without necessarily a vision to take it bigger…”
Although we would never dare argue with Melanie, we would suggest (very politely!) that in many cases women entrepreneurs have just been battered into submission. As Warren Buffet once said, one of the secrets to his success is that he’s only been competing with only 50% of the world, as women have been pushed out of finance (his point being that this is a crazy and totally stupid situation). If time and time again you reach for the finance application form knowing that there is an 80-90% chance you are going to be rejected, then you really cannot be blamed for starting to think your family were right, it’s time to settle down…
The AfDB’s Dr.Jennifer Blanke said at the The Global Gender Summit 2019, Kigali: “We know that women are a good bet. We know they pay back. We know they run excellent businesses – and yet they are not getting financed”.
Throughout all of this our membership has grown as more African Women Entrepreneurs have searched for a community, a home from which to learn, to explore ideas, and to support one another. This has been shown to be more important now than ever and indeed in the recent B2B LionessXpo, the Whatsapp group was humming with Lioness2Lioness deals being done.
So back to this week’s hero, Chuck Yeager (who incidentally last broke the sound barrier in 2012, aged 89, in an F-15!): He was always annoyed when people asked him if he had the right stuff, since he felt it implied a talent he was born with. “All I know is I worked my tail off learning to learn how to fly, and worked hard at it all the way,” he wrote.
“The secret to my success was that somehow I always managed to live to fly another day.”
Keep the faith, Lionesses.
At some point the penny is going to drop and the world of finance will see you for what you are, brilliant business-women who have built inspirational companies with very little or no financing, you have worked and trained hard, and most importantly - you have ‘The Right Stuff’. Once they recognize this and have broken the mental barrier to investing in women, they will be as shocked as Chuck when they see such relationships as a “perfectly paved speedway”.
In the meantime, keep your customers close, continue to give them value, carry on controlling your cashflow, and most importantly - “live to fly another day”.
Stay safe.