Why Supporting Women in Business is at the Heart of What We Do
By Erin O'connoC | Tue Mar 02 2021
“...A woman might have an excellent idea on how to develop her business. But if she wants to get a loan from the bank to expand her business, she needs to have the approval of her husband. And if the husband doesn't approve, then that noble idea must be buried for the rest of her life because her husband didn’t understand it.” - Graduate of The Exec’s Program
As we approach International Women’s Day, it is important to remember and shed light on the context under which many women entrepreneurs, executives and employees operate. Unfortunately, stories and sentiments as outlined in the above quote are not unique to East Africa (globally, only one out of three businesses are owned by women); it is an all too common reality that women must face and is why, ultimately, there are less women entrepreneurs succeeding in this part of the world. After operating in Ethiopia for the past nine years, RENEW understands the hurdles that women must face in owning and/or managing a business. It is because of this that we have made it one of our guiding goals to find ways to enable and equip women with the tools they need to overcome the barriers holding them back.
Barriers in the business world in East Africa tend to be a bit different than the barriers we find in places like the United States. Women are far from being equally represented in Ethiopia’s private sector which, in turn, holds back Ethiopia’s economy from living up to its full potential for equality, job creation, growth and innovation. According to studies, less than 30% of SMEs in Ethiopia are owned or managed by women, and Ethiopia ranks last relative to other countries in the region for women in management and women in entrepreneurship. Further, while gender-inclusive employment practices are critical to developing an equitable society as well as driving business growth, the SME sector is not currently doing enough to promote and incentivize these practices among businesses. We believe that in order to fix this, women need to be given access to resources, financing and best practices to not only move their businesses forward but also help drive Ethiopia towards becoming a gender-smart economy.
“The challenges go back to...how women are raised, and how society sees them. I don’t have a sense of entitlement and fearlessness that is more ingrained in men. Had I been a man in my situation, I probably would have gotten more aggressive in getting a bigger investment, but as women, we are told to be more cautious.” - Graduate of The Exec’s Program
Historically, gender dynamics within Ethiopia’s business environment have compounded the known problems of the “missing middle” - lack of access to finance and human capital development. In 2016, The Ministry of Women Affairs published a Development and Change Package of Ethiopian Women Report which noted that there was a need to develop a society wherein women are equal participants and beneficiaries of the economic, social and political life of the country. That’s why at RENEW, we believe that providing educational and financial training to women in the private sector is an important step forward in supporting women’s equality and empowering women within the country and region.
“...As I mentioned earlier, access to finance and land - they go hand in hand. If I had land then I would be able to get access to financing, because they don’t give you loans [unless you have collateral].” - Graduate of The Exec’s Program
RENEW has found that women entrepreneurs confront even higher barriers to finance than men because they often lack the collateral and banking relationships to secure loans, are not readily invited to investment forums and “after-hours” events to meet with equity investors and potential clients, and lack networks and market linkages that are afforded to their male counterparts. It is also evident that women entrepreneurs, executives and managers face a persisting historical disadvantage - they are not working from the same starting point nor in as safe of a working environment as their male counterparts. In addition, domestic and family commitments place significant demands on their time resulting in less availability to dedicate to skills training and business development.
“As a woman, there is always a challenge...Most of the time we have a fear of failure at the beginning. I think risk-taking is also our problem. And the other thing is, balancing the business with your family. As a woman, you have a lot of things to do with family and children for most of us, I think.” - Graduate of The Exec’s Program
This is why RENEW supports and advocates for women’s economic empowerment and gender equality. We want the realities these women identify above to change, and we want the barriers they face to be non-existent. By providing business trainings, policies, practices, and leadership development opportunities, as well as investment facilitation services and networking opportunities, we’re doing our part to try to tackle discrimination and inequality within SMEs in East Africa. RENEW seeks to overcome the barriers that women entrepreneurs and executives face by shifting the mindset and cultures of SMEs so that work environments are supportive of women’s priorities. Our long-term goal is for women beneficiaries to be empowered in the private sector and no longer have to choose between their careers or their families, thereby helping drive Ethiopia towards becoming a more gender-smart economy.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.