That female entrepreneurs find it more difficult than their male counterparts to access finance has become so hard baked into the narrative of women in small business that it’s almost an immutable law.

In October 2024, Leila Mokadem, the AfDB director-general for Southern Africa, noted that in SA, female-owned SMEs represented 50% of all businesses in the country, employing more than 55% of the workforce and contributing significantly to the country’s GDP. However, almost 50% of these businesses are financially excluded, with a financing gap of close to R100 billion.

That tracks with research by the SME Finance Forum, which calculated the financing gap between men and women entrepreneurs at $5 billion – largely because financial institutions perceive women entrepreneurs as a risky investment.

‘Despite the evidence showing that women generally have better credit repayment records than men, financial institutions often perceive women-led businesses as riskier, which limits their chances of getting financial support,’ says Thobile Radebe, a lecturer in entrepreneurship, strategy and marketing at the Stellenbosch Business School.

Part of the reason women entrepreneurs struggle to access finance is that, because of historical economic disadvantages, they often are unable to provide the collateral required by traditional lenders. ‘Women were seen as the backbone of household management, while men were granted opportunities to work, build assets and gain equity, leaving women to handle home responsibilities without financial compensation,’ says Radebe.

Women business owners face something of a double whammy when it comes to the matter of seeking financing.

According to research in an earlier edition of the Global Entrepreneurship Monitor (GEM) South Africa Report, women are perceived as a risk by virtue of the very fact that they have to balance their duties in the home and at work.

‘It is widely acknowledged that women in business have greater challenges in balancing business and home life, due to societal expectations of women as primary homemakers and caregivers,’ says Natanya Meyer, lead author of the latest GEM South Africa Report 2023/2024 and associate professor in the University of Johannesburg’s Department of Business.

‘This influences how women in business are perceived, by funders for example, resulting in adverse outcomes.’ As a result, says Meyer, women are less likely than men to apply for finance for their first year of operations.

And here comes the other whammy – Meyer links the fact that women-led businesses ‘remain modest in scale and lacking substantial prospects for expansion’, to a lack of access to funding and support resources, along with their more cautious approach to risk.

If she were alive today, Elizabeth Ann Greyvensteyn would probably be considered

an entrepreneur by any measure. Greyvensteyn, fondly known as Ouma Nannie, is the original ouma of Ouma Rusks, whose origins stretch back to 1939 and the Great Depression.

The story goes that the local pastor offered the women in his congregation 30 pennies

each to start a small business to stimulate the local economy in Molteno, in the Eastern Cape. Greyvensteyn started baking buttermilk rusks to sell at church fetes and other community gatherings. Scaling up the business, she dispatched her husband, Thys, in his bakkie to sell the rusks in neighbouring towns.

When the family wanted to expand the rusk-making operation on their farm in 1941, Greyvensteyn’s son Leon, who had joined the family business, applied for a £1 500 loan from the newly established Industrial Development Corporation (IDC). That it was her son and not Greyvensteyn herself who applied for the loan is no surprise, considering the time and place.

Almost a century later, Radebe points out that while SA in 2025 has progressive policies promoting gender equality, the financial sector charters lack specific targets for women’s financial inclusion, leaving them underserved. Added to that, many women entrepreneurs are not aware of funding opportunities open to them. And they do exist…

Of the public-sector funds aimed specifically at women entrepreneurs, Radebe cites the Women Empowerment Fund (WEF), Isivande Women’s Fund (IWF) and the National Empowerment Fund (NEF).

The WEF is geared towards black women entrepreneurs, offering from R250 000 to as much as R75 million across a range of sectors, for start-ups and businesses wanting to scale up and to finance equity acquisition.

The IWF, managed by the IDC on behalf of the Department of Trade, Industry and Competition through Identity Development Fund managers, targets black women at the bottom of the economic ladder. It offers long- and short-term loans from R30 000 to R5 million in the form of debt, equity or quasi equity. Again, the funds can be used as bridging finance or for growth and expansion or 51% acquisition of a business.

The NEF’s Women Empowerment Fund also offers business loans of up to R75 million.

The AfDB, meanwhile, is partnering with SA banks in a number of initiatives designed to give female entrepreneurs a helping hand, not only in SA but continent wide.

Locally, it is working with Absa to implement a R2.71 billion package of gender-focused financial solutions.

The package includes a R1 billion subscription into Absa’s inaugural social bond issuance, which was listed on the JSE in November 2024, with proceeds earmarked for providing affordable housing loans to 3 600 female-led households with a goal of empowering them as first-time homeowners in low-income segments.

In addition, Absa has secured a R1.7 billion sustainability-linked Tier 2 loan designed for SMEs, women- and youth-owned enterprises, targeting 6 000 entrepreneurs in the next four years. As part of this agreement, Absa will also work with the AfDB to enhance skills among Absa staff and women business owners.

Meanwhile, the AfDB-backed African Guarantee Fund (AGF) and the Banking Association of South Africa (Basa) have launched the Affirmative Action for Women in Africa Finance series to develop an inclusive financial ecosystem for women-owned and -led businesses. It also offers financial mechanisms to unlock financing for women-owned and -led SMEs.

‘This partnership with the AfDB and AGF is exciting in that it presents a sustainable way to increase and deepen financing to women-owned SMEs,’ said Basa chair Mary Vilakazi at the launch with the AfDB in Sandton in January 2024.

‘Local and global research has proven the efficacy in funding women-owned businesses not only in their ability to repay their loans but also in the societal and poverty alleviation ripple effects of financially independent women in business,’ she said.

Nedbank, meanwhile, has been working with the Africa Women Innovation and Entrepreneurship Forum since 2017 on a growth accelerator to support early-stage and high-growth-oriented, women-owned and -led SMEs with training, advice, mentoring, networks and access to finance.

In May 2025, FirstRand Bank announced it would be lending up to R1.8 billion to SMEs, especially those led by women and those active in climate-related sectors such as sustainable agriculture and healthcare. The initiative is backed by a $50 million partial guarantee from the International Finance Corporation.

In addition, FirstRand’s commercial division, FNB, has raised an extra R2.5 billion from a social bond issued by FirstRand for loans to women-owned SMEs.

It also noted that as of June 2024, FNB had extended R50 billion in loans to 229 000 women-led businesses in SA.

Absa’s She Thrives initiative, launched in 2023, offers a range of preferential financial services to businesses that already bank with Absa and have a 50.1% majority shareholding by women. Benefits include no monthly fees for the first six months, discounts on insurance and membership to the National Small Business Chamber.

In addition, the bank’s Women Empowerment Finance initiative offers loans of up to R15 million to new and existing black-women-owned businesses that have a revenue stream and positive cashflow but lack a deposit, collateral or security.

Meanwhile, fintech Lula has identified women-owned SMEs as a critical market for funding support. It offers a revolving capital facility that provides business loans of up to R5 million, with no monthly account or admin fees and a capital advance in the form of a lump-sum payment that can be paid off over up to 12 months.

Then there’s loan provider Business Partners, which launched its Women in Business Fund 10 years ago. It offers funding of up to R50 million per investment to commercially viable businesses that are at least 50% female owned, with active female participation.

While Radebe acknowledges that the private sector plays a crucial role in improving access to finance for women-led SMEs, she says more needs to be done to establish more investors ‘such as angel investors and venture capital focusing on women-led businesses, recognising their strong repayment records and growth potential’.

According to Standard Bank, which is involved in an initiative to boost women asset managers, research shows that a mere 7% of private equity and VC funding is allocated to women-led businesses in emerging markets.

Established in 2022, with support from Standard Bank, the Economic Commission for Africa and the AU Commission, among others, the African Women Impact Fund aims to redress this imbalance in private equity and venture capital funding to women-led businesses. It wants to raise $1 billion in the next decade to be allocated to women asset managers who in turn will invest in high-impact and underserved sectors that feature women-led businesses.

Like Ouma Nannie, today’s female entrepreneurs have the potential to create local brands with exceptional staying power; unlike Ouma Nannie, they can increasingly access the finance to do it themselves.

By Robyn Leary
Images: Gallo/Getty Images