Female entrepreneurship in South Africa

Introduction

Women represent more than half of South Africa’s population. Even so, their participation in the business sector remains significantly low. According to the Global Entrepreneurship Monitor 2016/2017, the highest female rates in South Africa occur among those 45-54, showing entrepreneurship undertaken primarily in late career stage. The low overall female entrepreneurship rate is explained by the relative lack of participation among the two youngest age groups—those 18-24 and those 25-34. The high unemployment rate among women currently being approximately 32% of the total labour force makes them the most vulnerable population group in the country. Entrepreneurship is a safe career path for most women in South Africa who are the main breadwinners mainly in rural areas.

Gender disparities in the country have always been a hindrance to the career development of women: poor access to business opportunities and information, educational gap, limited skill set, high wage inequalities, lack of capital and assets, low self-esteem and confidence, limited business networks. On another note, gender bias and stereotypes create the idea of a perfect businesswoman in a male-dominated industry setting a very highly competitive standard where women entrepreneurs must deal with numerous challenges without being daunted at the same time. Conflicts and discrimination at the workplace, imbalances between work and family responsibilities, time pressure, stress, anxiety and mental tiredness undermine women’s entrepreneurial progress.

Women in the Small, Micro- and Medium Enterprises sector

The Rainbow Nation must recognize the massive involvement of females in entrepreneurship, therefore the boost of the country’s economic growth. Small, micro- and medium enterprises (SMMEs) successfully managed by South African female entrepreneurs contribute to the economic development within the country not only by creating income and employment, reducing poverty and providing economic stability but also by reducing crime rates, and supporting and empowering the community. The 2015 Female Entrepreneurship Index (FEI) developed by the Global Entrepreneurship and Development Institute (GEDI), the world’s first diagnostic tool that comprehensively identifies and analyses the conditions that foster high potential female entrepreneurship development, ranked South Africa 36^th among 77 countries worldwide.  Entrepreneurial environment (spirit, culture and institutions that support start-ups), eco-system (access to resources and institutions) and aspirations (individual entrepreneurial characteristics, resources availability) shape the index which showed that South Africa has a fairly strong entrepreneurial environment but rather a weak eco-system as well as aspirations.

Female entrepreneurial success stories

Ntsiki Biyela, one of the top women entrepreneurs in South Africa, two-times finalist for The Most Influential Women in Business and Government and founder of Aslina Wines, believes that it’s important to stay grounded and that you don’t have to be perfect – be yourself. It’s about passion, excitement and drive.

Another successful female entrepreneurship story is Thato’s Moagi, a 27-year-old award-winning woman farmer and Managing Director of LeGae La Banareng Farms in Limpopo who was praised for her contribution to the South African economy through the commercial agricultural sector. And that happened despite the hurdles she met along the way such as lack of access to land, funding and limited access to technological advancements and market opportunities.

Most South African women entrepreneurs like Thato make their mark in the agricultural sector and contribute much to the rural economy. Though women may be entrepreneurs in their own rural homes, it is hard for them to branch out and have an actual building from which to run a business. This is so because they have problems getting finance to possibly open their own business.

Financial needs and access to services

When it comes to access to formal and informal financial services for these businesses, the FinscopeSurvey showed that 52.1% of male owned businesses were banked vs 43.1% of female owned businesses, female owned businesses relied on informal financial services more than men, and 43.7% of female-owned businesses were financially excluded.

Researchers have concluded that business ownership by women in South Africa should be promoted by providing support in the form of advice, training, access to finance and networks, gender-balanced mentoring in work matters and balancing emotional and work–life issues. For those reasons, the Department of Trade and Industry initiated the Isivande Women’s Fund (IWF) with the aim to accelerate women’s economic empowerment by providing more affordable, usable and responsive finance than is currently available. The IWF improves and expands access to finance to women entrepreneurs by lending and investing in women enterprises and thus generating income that could improve their living standards.

 Entrepreneurship in Cape Town’s townships

Other local business initiatives at the communities of Cape Town have managed to empower other businesswomen in an effort to showcase and leverage their skills and knowledge taking on various business challenges. Xoliswa Tsholoba and sisters, Wente and Letticia Ntaka, female entrepreneurs from the largest community, Khayelitsha, founded the Women in Business Zone (the Zone) so that they can work together and bid for larger-scale projects. Their successful project employed approximately 50 people made them the first black women to install fibre-optic cables in Khayelitsha. All three said that it made sense to team up because they saw many businesses fail because of a lack of support. Therefore, they’ve collaborated to launch the Zone. “There’s nowhere you can talk about your problems and get advice from people who are walking the same road as you,” said the women. The three businesswomen were selected to participate in the Small Business Academy (SBA) at the University of Stellenbosch Business School (USB). The SBA is a sponsored programme that takes 30 to 40 township entrepreneurs a year through a nine-month course offering training in business fundamentals, networking opportunities and mentorship whereby each participant is matched with an alumnus of the USB’s MBA programme.

Concluding remarks

South African authorities need to further target women entrepreneurial development primarily focusing on political, economic and social strategies in order to deal with the high levels of unemployment, improve the living standards and alleviate poverty in townships and rural regions. Women entrepreneurs have to gain access to more opportunities in the SMME sector which can be only addressed by a better shaped, gender-oriented policy framework- that one that holistically and individually approaches all business women in particular regions of the country.  

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