Recognising the crucial role women entrepreneurs play in the economy and small businesses as drivers of growth, a number of companies in SA are focusing their efforts on funding female-owned SMEs


Nonhlanhla Mabe, a widow and single mother living in the East Rand township of Katlehong, owns a prosperous business – the Malang Tuck Shop – which sells consumable and household goods to locals. She is not short on passion or hard work, but Mabe could not have achieved her level of success without investment and business support.

The entrepreneurial training she received via the Coca-Cola Company’s 5by20 campaign has helped her business thrive. Among other things, she is now able to manage her business records and price her products correctly, both maintaining existing customer relations and attracting new ones.

Mabe’s SME success story is one of many in SA, each acting as small yet powerful building blocks for job creation and a boost to a sluggish economy.

According to the 2014 SME Survey, 78% of the country’s female-owned small businesses are profitable, compared to their male counterparts at 70%. SA’s economic policy places a high value on entrepreneurship and considers it a critical driver of growth and job creation. As such, government and private enterprises have put programmes and funds in place aimed at empowering women.

‘SMEs play a most important role in the development of the economy and the creation of new jobs, a factor which is vitally important from a South African context where unemployment and poverty is on the rise,,’ says Danny Vermeulen, Attacq empowerment specialist. ‘An increase in female participation in the economy provides for a shift in the labour force participation and, ultimately greater diversification. There are vast skills and attributes waiting to be unlocked.’

A growing body of evidence has shown that investing in women-owned businesses success positively impacts local economies, child mortality rates, welfare and education. While women still operate at the margins of the economy, it is encouraging that the majority of funding and training programmes for SMEs (valued at billions of rands) fall under the Department of Trade and Industry, which has a wide variety of low-interest options available for female entrepreneurs.

The International Labour Office’s 2015 World Economic and Social Outlook report highlights a number of economic benefits of increased female participation in the labour force. Economies with high levels thereof are more resilient and experience fewer economic growth slowdowns, making it a powerful anti-poverty device.

According to a recent Global Entrepreneurship Monitor (GEM), in SA ‘the percentage of 18- to 24-year-olds involved in early-stage entrepreneurial activity is considerably lower than the average for Africa (which is 2.4 times the South African figure for this age group), as well as lower than the average for efficiency-driven economies, which at 13% is double the South African figure’.

The number of women entrepreneurs is growing and they are starting businesses in fields previously dominated by men, but the number of female-owned SMEs is far from where it should be.

A 2014 Goldman Sachs report on SMEs found that ‘only one-third of the world’s SMEs in the formal sector are run by women, with a wide variation across countries and plenty of scope for growth’.And according to the GEM report, there is a considerable widening of the gender gap in terms of entrepreneurial involvement in SA. In 2014, eight women were engaged in early stage entrepreneurship for every 10 male entrepreneurs. In 2015, this decreased significantly to just six women for every 10 men.

‘Women are an undervalued force that can play a role in rekindling the economy,’ says Dianne Richards, monitoring and evaluation manager at Old Mutual. ‘They have long been overlooked and marginalised in our society, particularly in entrepreneurship where we find independent enterprises to be an important vehicle to empower women.’

Today, women continue to lack social support when starting businesses – especially if there is a sense that the business will interrupt more traditional family-orientated roles. Further, men have historically enjoyed easier or better access to education and, according to Richards, men are still favoured over women when seeking funding, as there is an unconscious bias that women will not be as reliable an investment as their male counterparts. ‘Yet, research has shown that women not only tend to invest funding more wisely than men but are better able to “boot strap” their business in the beginning of their entrepreneurial journey,’ she says.

Gender equality and transformation is thus high on the list of priorities for SA corporates. In funding SMEs, they aim to increase the footprint of black women-owned businesses, particularly in rural, peri-urban and township areas.

‘Absa understands that a strong SME sector is a key driver of employment and poverty reduction,’ according to Nokwezi Luswazi, the bank’s head of business development support (enterprise and supply chain). She argues that SMEs have a disproportionally large impact on lower-income communities, providing informal work opportunities to many who do not necessarily have the qualification or experience to secure formal employment in large businesses.

Women seeking entrepreneurial opportunities face numerous barriers to entry, including access to finance and other support in growing a business. In developed markets, approximately 80% of future jobs will be created in SMEs, according to the World Bank. However, more than 50% of SMEs lack access to finance, which hinders their growth.

So what are some of SA’s corporates doing to put their weight behind this much needed growth?

The Old Mutual Foundation funds and provides ongoing support to black-owned businesses with high potential for job creation. Through a hybrid funding model with its primary funding partner, Masisizane Fund, the foundation’s approach to enterprise development includes access to funding (loans and grants) as well as support in the form of financial management and business skills.

A strategic shift in 2014 has seen the foundation fund qualifying for-profit entities directly, and it has since spent R28.6 million on enterprise development projects. It provides funding in the form of working capital and asset finance, both to start-ups and existing businesses that are expanding or restructuring.

Businesses must be at least 51% black-owned and preference is given to women, youth and people with disabilities.

Absa, on the other hand, brings together female mentors to accelerate women-led entrepreneurship across all sectors through its annual Women in Business series. It also offers various products and services (including the Women Empowerment Fund) that deliver support to women.

‘We are mindful of the specific needs of this segment based on our historical context as a country,’ says Luswazi.

As a banking institution, Absa is helping to remove obstacles to business opportunities and economic participation that women face by providing support – financial and otherwise. ‘Through a number of initiatives, we are also identifying and building networks of women entrepreneurs poised to transform their societies by owning, running and operating businesses,’ says Luswazi.

Enterprise development is a central pillar of Absa’s Shared Growth strategy, which also focuses on education and skills and financial inclusion. ‘The bank has committed to raise R1.3 billion to support the sustainable development of SMEs, including those owned and run by women,’ she says.

Then there’s the Coca-Cola Company, which in 2010 launched the 5by20 campaign – a commitment to enabling the economic empowerment of 5 million female entrepreneurs globally across the company’s value chain by 2020 – with the goal of reaching 110 000 in SA alone.

In so doing, Coca-Cola SA partnered with UN Women and local implementation partner Hand in Hand in 2014 to roll out a three-year programme that addresses barriers facing women entrepreneurs by providing them with business skills and leadership training, mentoring and peer networking. Learning stock and finance management, customer service and the many other skills the training provides enables women to improve their daily business practices and increase their profit.

‘In our view, the biggest issue South Africa is facing in addressing gender equality and skills development is that many female microentrepreneurs do not have the relevant business skills training that would help sustain or elevate the businesses growth,’ says Zipporah Maubane, head of communications and sustainability for Coca-Cola Southern and East Africa.

‘One of the aspects of the 5by20 programme is aimed at alleviating the plight of women in the small retail industry by providing them with skills that will help them manage, market and grow their business successfully.

‘Initial results indicate that the training has already begun to stimulate business growth, and many participants are now able to make better informed decisions about their businesses, which are positively impacting their families and communities,’ she says.

Of course, there are numerous other SA companies that actively recognise the significant growth potential of female job creators rather than job seekers, and which are helping to change lives, one small business at a time. And this is most certainly cause for optimism.

By Tracy Melass
Photography Andreas Eiselen/HMimages