By Jewel N. THOMPSON
Despite Africa having one of the highest rates of female entrepreneurship in the world, women-led businesses remain disproportionately smaller, underfunded, and often constrained to low-profit sectors.
While access to capital dominates conversations about women’s economic participation, financial limitations are just one piece of a much larger puzzle. If we are serious about unlocking Africa’s economic potential, we must address the structural, social, and systemic barriers that limit women entrepreneurs from scaling their businesses.
Last year, I spoke on two panels focused on access to finance for women-owned businesses in Africa. My fellow panelists and I shared a common sentiment: When will this stop being a topic for discussion? However, during my second engagement—an inclusive finance forum in Northern Ghana—I gained a deeper understanding of the persistent, multi-layered challenges that make this an ongoing challenge.
The information gap
For many women in Africa—particularly in rural communities—the challenge begins with access to information. While numerous initiatives exist to support women entrepreneurs, from gender-smart funding vehicles to financial literacy programmes, these opportunities remain out of reach for many of the women they aim to serve.
Unlike their male counterparts, women entrepreneurs often lack the networks and centralized access points where crucial business intelligence circulates. Programmes such as ABSA Banking’s partnership with the International Trade Commission offer financial literacy and funding options, yet knowledge of such programmes is limited in many entrepreneurial communities. It is not enough for these opportunities to exist; they must be deliberately and strategically be disseminated to ensure women can access them.
Structural and social constraints
Even when women are aware of available opportunities, external constraints continue to hinder their ability to scale. Many operate in financial systems that are not designed to meet their needs. The absence of credit markets and insurance mechanisms prevents them from taking on higher risk, higher-reward ventures.
Research conducted by the WorldBank indicated that the lack of childcare support and flexible labor structures forces many women to make trade-offs between their businesses and their personal responsibilities, limiting their ability to reinvest time and effort into growth.
Women entrepreneurs are not merely optimizing for profit—they are navigating multiple, intersecting barriers that force them to maximize survival over expansion. Without structural reforms that address these market difficulties, women will continue to bear the brunt of an economic system that demands their participation but fails to support their growth.
Beyond technical training – the missing piece in entrepreneurial programmes
Across Africa, a growing ecosystem of accelerators, incubators, and entrepreneurial training programmes aim to equip women with the skills they need to thrive. These programmes excel in technical training, financial literacy, and regulatory compliance, filling critical knowledge gaps.
However, they often overlook the importance of social skills—effective networking, negotiation, and self-efficacy—that are just as vital to entrepreneurial success. Studies have shown that higher self-efficacy directly correlates with business performance, yet most programmes do not incorporate strategies to help women build the mindset necessary to push their ventures beyond survival mode.
A well-structured business plan is useless if an entrepreneur lacks the confidence to pitch, negotiate, and make strategic decisions. To truly empower women entrepreneurs, we must move beyond competency-based training and design programmes that further cultivate leadership, resilience, and strategic decision-making.
Additionally, programme design should avoid segregating women into isolated tracks that separate them from the broader entrepreneurial ecosystem. It is just as crucial for women to engage and network with their male counterparts, fostering collaboration, shared learning, and generate efforts to break down gender biases within the business community.
Breaking into high-revenue industries
Another challenge women entrepreneurs face is their overrepresentation in low-profit sectors. Goldstein, Gonzalez & Papieni (2019) discovered across Africa, male-led businesses dominate industries such as construction, manufacturing, fin-tech and transportation—sectors that generate significantly higher revenues or investments.
In contrast, women-led businesses tend to cluster in retail, hospitality, and social services, which require lower startup capital but offer limited scalability. The result? Even when women gain access to funding, they remain locked in competitive, lower-margin markets with fewer opportunities for expansion. But research suggests that when women break into male-dominated industries, they see higher returns.
A study in Uganda by Campos and Gassier (2015) found that women who transitioned into male-dominated fields earned significantly more than their counterparts in traditional sectors. This means that the gender gap in entrepreneurship is not just about who starts a business, but what sectors they operate in. Encouraging and supporting women to enter higher-revenue industries through targeted mentorship, investment, skills development in traditionally male-dominated industries including STEM coupled with policy incentives is critical for closing this gap.
Rethinking funding models
The way we approach funding models for women entrepreneurs must evolve. Traditional venture capital structures and development finance institutions (DFIs) often operate under financing models that do not align with the realities of African entrepreneurship. Capital access should not be a one-time event but a continuous process. Women need capital infusions at multiple stages of their business growth, not just at startup. This requires African investors, VCs, and DFIs to rethink their funding strategies—not simply offering initial seed capital but also providing follow-on investments, working capital, and sector-specific financial products that allow women to scale sustainably.
This also means African investors, VCs, and DFIs must consider introducing more small-ticket bridge capital to support essential business needs such as purchasing equipment or expanding marketing efforts. Not every woman entrepreneur requires $200,000 to $1 million in funding, and many do not meet the stringent benchmarks for accessing such capital. The real gap lies in missing middle financing—providing accessible, appropriately structured funding that ensures transparent fund utilization, sound financial management, and reasonable repayment terms. Filling this gap is critical to bridging early-stage growth hurdles and enabling long-term scalability for women-led businesses.
A call to action
Africa’s economic future also depends on the success of its women entrepreneurs. But supporting them requires more than just funding, it demands a complete shift in how we design policies, programmes, and financing models. If we are serious about accelerating action for African women in entrepreneurship and not waiting 134 years to reach gender parity, it is time for governments, investors, and business leaders to stop treating women’s economic empowerment as a continuous talking point and start evaluating existing programmes and resources to ensure they are adequately designed within the context of the woman entrepreneur in the most rural marginalized community to the one who is building Africa’s next greatest innovation in her university’s incubator.
The question is no longer if we should invest in women entrepreneurs. We must now move towards building the comprehensive systems necessary to ensure they thrive.
>>>the writer holds an MBA and is a Lecturer in the Economics and Business Administration Department at Ashesi University where she leads the Entrepreneurship concentration and the Foundations of Design & Entrepreneurship course. A recognized leader in Africa’s entrepreneurial ecosystem, she co-developed the Ashesi Venture Incubator and is the founder of African Women Amplified (AWA), a platform closing the funding gap for West African women entrepreneurs. A 2021 Fast Company World Changing Ideas Honoree, she is also a West Africa Acumen Fellow and Georgia State 40 Under 40 awardee. She holds a Global MBA from Georgia State University and IAE Sorbonne Business School, with a certificate in Social Entrepreneurship from INSEAD and a certificate in business management from the University of Rio De Janiero, COPPEAD Business School. She is currently pursuing her PhD at the University of Ghana focused on cultural systems and African innovation.
