Women are a crucial tool for economic development and in Africa they account for over 50% of the population. Further, Sub-Saharan Africa leads the world in female entrepreneurship rates and Ghana is one of the top ranked countries in this regard. Surprisingly, given these facts, in 2018 Africa’s women contributed only a third of the continent’s GDP[1].

This irony hints at a gap between entrepreneurial activity and profitability. One of the reasons for this gap is that accessing appropriate finance to operate and grow their businesses continues to be a struggle for women. The result is smaller, less capital intensive, less revenue earning and less profitable businesses that provide fewer jobs, compared to men’s businesses.

Women often cite difficult access to finance as a major business hurdle and it needs to be overcome for the achievement of equitable business outcomes with their male peers. This was the motivation for recent workshops organized by GCIC for its women cohort.

The factors behind difficult access to finance for women include many that are external to them or exogenous, and others that are shaped by their own behaviours and are therefore endogenous. Some of these factors are shown below:

Exogenous Factors:

• Funders associating women’s businesses with higher risk.
• Lack of suitable types of finance for women’s needs.
• Male-controlled funding organizations
• Prohibitive cost of finance.
• Lack of assets to use as collateral for loans.
• Customary laws and traditions that limit women’s inheritance rights or land acquisition.

Endogenous Factors:

• Women’s self-perception of being unqualified.
• Women’s risk aversion.
• The informality of many women’s businesses.
• Women’s lack of investor readiness.

To overcome exogenous obstacles, a profound paradigm shift is required to enable women to inherit and own assets to use as collateral, remove the perception of their lower competence and attract more women financiers to decision making positions. Such a move is long overdue and would help to put more finance in the hands of women who need it.