In whatever economic sphere they are found, Nigerian women are hardworking. And the phenomenon cuts across ethnic lines and international borders.
A recent report by the British Broadcasting Corporation (BBC) says Nigeria has the highest number of female entrepreneurs in the world. The figures for their European and American counterparts pale into insignificance when compared to Nigerian female entrepreneurs.
According to a study by the ‘No Ceilings Initiative’ of the Bill, Hillary & Chelsea Clinton Foundation, a woman in Nigeria is four times more likely to be an entrepreneur than a woman in the U.S.
Women constitute 52% of the total European population but only 34.4% of the EU females are self-employed and 30% are start-up entrepreneurs.
On the other hand, more than 41% of women in Nigerian are entrepreneurs, making Nigeria the country with the highest number of female entrepreneurs. 42% of these women are shown to have received loans from family and friends to start their businesses while only 2% have received from financial institutions.
By the sheer fact that more than 41 percent of women in Nigeria are entrepreneurs is an indication that they record reasonable success in their individual sphere of business.
The implication of that statistic is that with more women entrepreneurship the country could be lifted out of the cycle of poverty currently having a stranglehold on the economy. The reason is obvious.
According to the International Trade Centre (ITC) executive director, Arancha González, African women entrepreneurs reinvest 90% of their revenues into the community. That reinvestment includes the areas of education, nutrition, household expenditure, and caring for children and elderly people as social services that women buy with profits. Their male counterparts in contrast reinvest just 40 percent.
The implication is clear. With more women empowered as entrepreneurs, such development needs as children’s education, proper nutrition and social welfare services will be more assured than the status quo.
It goes to assert that elevating the economic role of women through technical support and improved access to financial services will reap greater social benefits than giving funds to men.
But developing societies seem not to afford women entrepreneurs all the needed support opportunities to latch on to their full entrepreneurial potential.
According to Caren Grown, senior director for gender at the World Bank, “there is evidence that women-owned small and medium enterprises globally tend to be concentrated in overall low-profitability or low-growth sectors. Retail, beauty and food services are among the sectors in which women focus. In Africa and Asia, about 75 percent of women are in these consumer-oriented sectors. They are rarely in mining, construction, electronics and software.”
The problem is that this centers women in sectors that are low earning and domestically focused with low prospects of economic and business growth, which Grown says helps explain the gender earnings gap. Such inherent earning gaps naturally hamper women’s hefty 90 percent reinvestment in the community.
Focusing on these sectors also limits financial opportunities, with banks considering these businesses less of an investment opportunity. But there is opportunity for far greater economic advancement. When women cross over into male-dominated sectors, they can earn three times as much as in traditionally female-dominated sectors.
By encouraging women to enter male-dominated sectors — and thereby changing the mindset of financial lenders and providing new opportunities for women to learn, grow and develop entrepreneurial businesses — women in developing countries can escape poverty and improve their country’s economic condition.
For example, governments award procurement contracts for goods and services to a range of businesses. These contracts can comprise everything from office supplies to jet fighters to consultants, according to the International Institute for Sustainable Development.
In some places, women are not part of the economy; they are considered to be a non-asset of the economy.
It’s almost like you have a plane with two engines but you only fly with one engine. You need to have both engines running if you want to generate the maximum amount of growth.
The most interesting thing about women entrepreneurs is not only that they are an amazing engine for economic growth, but they are an amazing engine for equitably distributing the growth – and it’s this second part that governments should care about, which is a huge issue of inequality. It also contributes to a healthier national gini coefficient.
A new generation of female Nigerian entrepreneurs is springing up, but businesswomen still face challenges accessing finance and other support.
Access to finance is a huge barrier for the advancement of women-owned businesses.
Grown explained that financial institutions perceive women to be “riskier clients, higher cost clients and lower return clients,” which negatively influences their investment in women entrepreneurs.” This is despite facts suggesting otherwise,” she said.
CEO and co-founder of WEConnect International, Elizabeth Vazquez explained that for the private sector, there are good business reasons to embrace women entrepreneurs: It can lead to greater profitability and enable them to better anticipate the needs of their market. “You can’t do that if half of the population is represented by women but all of your suppliers are men,” she said.
In analyzing more than 2,000 financial and banking firms, the World Bank found SME clients were performing well, but overlooked. “We need to think more about what we do with financial institutions,” Grown said.
Rebecca Ruf, vice president of programs for the Global Banking Alliance for Women, explained that her organization has 45 member banks supporting women-owned businesses. “You would think there would be hundreds and hundreds,” she said.
In Nigeria, the growth of microfinance banks over the past two decades and counting have lifted tens of thousands of Nigerian female entrepreneurs out of poverty; but much more needs to be done to make for an equalizing.
Increasing financial inclusion is contributing to bridging the entrepreneurial gap between the genders. But government can do more to bridge that gap by, for example, increasing the number of contracts awarded to female entrepreneurs.
When contract revenues of the magnitude usually awarded to male entrepreneurs are spread to females, with 90 percent reinvested in the community, a big difference will have been made.