by the Lionesses of Africa Operations Department
We have discussed the issues with male dominated finance previously (here) and how imbalances built into applications affect women (as Ai is sadly beginning to show us). Although it is great news that more women are being invited onto bank’s boards, until the Credit and Risk committees and their ‘tick boxes’ are redesigned to remove this strange but deep held belief that women’s businesses are more risky, we shall continue to hear the complaints from many who have raised funding ‘to invest in women’s businesses’ that they have searched high and low, yet been unable to find enough women in which to invest. As 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” (here).
So this week we are looking at the pressures on businesses and trade before the financing becomes an issue. Highlighting these issues opens the debate and shines a light on the problems so that solutions can be designed.
“It’s time to end the male monopoly in international trade.” was the title in an article from the FT by Linda Scott here that caught our eye. The article started by saying: “International trade is a male monopoly. According to the International Trade Centre, 99 per cent of trade and 99 per cent of procurement contracts, whether from governments or companies, are controlled by men.”
This is clearly a huge problem if what we see in Finance is anything to go by. Systems written by men, subconsciously favour men - just ask those behind the Apple Pay card and the shock felt when they realized their Ai system for awarding credit (written by men) gave women less credit than their Husbands (here)! If Apple’s Ai problem is anything to go by, we should be very worried by the lack of women in tech as more and more companies turn to Ai to control so much in our lives. Happily we are seeing more ‘western’ companies approach us to design new ways of bringing Lionesses into their businesses and of course their huge supply chains which is a great thing. We are also seeing large interest in the data that we can together investigate to find new solutions to what are huge problems. All of these show that where there is investigation, where there is light shone on problems, so the world starts to recognize that solutions have to be found. In addition to which, of course, we have individual successes, but to have successes for our entire >1.1 million membership, solutions to these structural problems have to be found at scale.
According to the Boston Consulting Group (BCG) and their ‘Want to Boost the Global Economy by $5 Trillion? Support Women as Entrepreneurs’ article (here) co-authored by Shalini Unnikrishnan and Cherie Blair (well known to Lionesses as a huge supporter of women’s entrepreneurship, not least through her brilliant Cherie Blair Foundation for Women and mentorship program to which many Lionesses have been invited), if women and men participated equally as entrepreneurs, global GDP could rise by approximately 3% to 6%, boosting the global economy by $2.5 trillion to $5 trillion.
But if this is such a ‘no-brainer’ what is holding back other companies and governments? As the SDG’s have shown, there has been a wish to solve such inequalities for decades now (previously via the MDG’s), so this is not a new problem for the world, nor is it a recent awakening that something has to be done.
Looking through the World Bank’s ‘Profiting from Parity’ (here), we began to see many of the additional problems that affect women over men. The World Bank highlights nine areas in which the mountain to climb for women entrepreneurs is steeper and more dangerous than for men. Most of these nine areas are well known and are being addressed by various Governments and NGO’s across the continent, but this is a very slow process indeed. These nine are as follows:
Legal discrimination: such as lack of ownership of property and difficulty in opening businesses - this has been addressed, but although now there seems to be legal parity between men and women in almost all of the countries of Africa, it is never as equal as it seems.
Social Norms: Such as influence by one’s peers and by one’s family as to the direction of many choices made by women, such as a University Degree and then what area of expertise. Obviously these then impact the choice of business.
Risk of gender-based violence: Shockingly, this is still a real issue for women and for women entrepreneurs.
Education and skills gaps: The World Bank has found that education and skill gaps in Africa are still “wide and persistent”. Again, shocking.
Confidence and risk preferences: We have all had moments where we doubt ourselves, the World Bank has shown that this is not uncommon, what they have also found is that because of this, Women entrepreneurs are less likely to take large risks in their business than men, which is strange as Banks are always telling us that women led businesses are more risky. More investigation is required here - as we know, having got a label, it is always more difficult to remove!
Finance and assets: Sadly here, because typically women entrepreneurs control fewer assets than men (certainly legal discrimination does not help), so their abilities to invest in their own business and then to access larger loans is impacted. “Female entrepreneurs in Africa have systematically lower levels of business capital – including equipment, inventory and property – relative to their male peers. Drawing on data from 14 impact-evaluation datasets from 10 countries in Africa, the typical male-owned firm has over six times the capital investment of female-owned enterprises.”
Access to networks and information: The World Bank is very clear here - new connections outside of family and friends to support the growth and competitiveness of their business are extremely important for the success of any business. Obviously we at the Lionesses Den are biased here, but we reckon that the community spirit, friendships made, plus support that all within our community give each other (even across different nations), means that actually this is one space where Lionesses have a greater chance of success than male run businesses.
Household allocation of productive resources: We have certainly seen and heard of this. Household money is invested in the husband or brother’s businesses before the women’s. When times are tough (such as 2020) there have been many occasions we have sadly heard that the women has had to take a step back from her business to support her husband’s. Of course on occasions, we have also heard the opposite has happened, but The World Bank suggests this is rare. As they say: “Women often lack authority over the allocation of household assets and may face more pressure to share resources, which restricts both their willingness and ability to invest in their businesses.”
Time constraints and care: Sadly this is an aspect that affects all women. Recent studies have found in the UK that ‘work from home has meant that women have spent not only the same time as before on household chores, but now have been spending more time than the husband on home schooling of their children. Huge inequalities and extra pressures for the women is a global issue sadly.
The World Bank suggest the following solutions:
1. Removing legal constraints to gender equality and regulatory implementation gaps;
2. Strengthening land tenure rights for women;
3. Expanding women’s linkages to new business networks;
4. Offering women-friendly training designs, including peer support;
5. Providing in-kind grants to female- owned firms;
6. Introducing financial innovations that reduce collateral requirements, including psychometric scoring;
7. Facilitating access to childcare services;
8. Engaging men to provide a more supportive environment for female entrepreneurs;
9. Incentivizing women to cross over to male-dominated sectors by sharing information on expected returns in those sectors, and through early exposure in the form of apprenticeships and male role models.
This last one is very interesting because it has been found that women led businesses are highly successful when they build businesses in typically male dominated sectors, such as construction and engineering. As The World Bank says: “Female-owned enterprises operating in male-dominated industries are as large and just as profitable as their male-owned counterparts. They are also larger than those in female-dominated sectors.” We have a large number of members who are engineers doing incredible things across the continent, so seeing this gives us great hope.
There is no doubt that we have come a long way in the past 20 years, not least because governments have woken up to the fact that there is a large correlation between gender equality, women’s empowerment and development. For example, the World Economic Forum reports that there is a positive correlation between gender equality and a country’s level of competitiveness, its Gross Domestic Product (GDP) per capita, and its rank in the Human Development Index.
We are also seeing this from the private sector as more and more companies recognize the importance of women led businesses in their supply chains. Writing in Forbes, Aida Diarra, Senior Vice President and Head of Sub-Saharan Africa at Visa, gave us good news (here) in the form of some of the findings from a study commissioned by Visa, in that 70% of women entrepreneurs considered themselves financially independent, and an huge 90% said they were now more empowered than five years ago.
However, the same study showed that market competition and a lack of funding were still major issues and in South Africa and Nigeria in particular “regulation, a fluctuating economy and a lack of viable mentorship” were major problems.” Market competition, if the playing field between women and men is not level is a serious issue that affects all women owned businesses.
We were reminded of a female ‘gamer’, who said that behind the technology she could be anonymous and treated as an equal as her ‘gaming’ name was gender neutral, thus removing any assumptions and allowed her to be treated equally by the other ‘gamers’ who on the whole are predominately male.
Although technology is increasing the opportunities for women and women owned and led businesses each and everyday, is hiding behind gender neutrality really necessary in the 21st Century? In 2021? Perhaps the World Bank investigation and the lack of funding and market competition issues as shown in the Visa study suggest that perhaps this may be the only solution. That all finance and ‘preferred supplier’ applications (such as some job applications in the UK which hide gender) should be gender neutral.
The shame.
Stay safe.