African Women Entrepreneurs Research Findings - CacheFly

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African Women Entrepreneurs Research FindingsPrepared by:

August 2019

Background

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Gender Gap Assessment – Comparator Markets

Source: World Economic Forum - The Global Gender Gap Report 2018

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Country Global Index Economic Participation And Opportunity

Educational Attainment Health & Survival Political Empowerment

Rank Score (0-1) Rank Score (0-1) Rank Score (0-1) Rank Score (0-1) Rank Score (0-1)

South Africa 19 0.755 91 0.645 72 0.992 1 0.980 17 0.404

Kenya 76 0.700 37 0.734 122 0.929 1 0.980 82 0.159

Nigeria 133 0.621 79 0.661 140 0.806 132 0.964 139 0.052

Rwanda 6 0.804 30 0.743 109 0.961 90 0.973 4 0.539

Namibia 10 0.789 12 0.804 42 0.999 1 0.980 20 0.375

Burundi 31 0.741 5 0.839 130 0.890 55 0.978 40 0.255

• The Sub-Saharan Africa region is characterized by high female labor force participation, which translates into a comparatively high regional average on theEconomic Participation and Opportunity sub-index.

• The top six countries on this sub-index—Benin, Burundi, Guinea, Cameroon, Namibia and Botswana—have closed more than 80% of their gaps and rank in theglobal Index top 20 for this dimension, while only the four bottom-ranked countries have not yet closed at least 60% of their economic gender gap.

• On the Political Empowerment sub-index, the difference between the highest-performing and lowest-performing countries is once again significant: Rwanda,

South Africa and Namibia have closed 54%, 40% and 38%, respectively, of their gender gaps, placing them in the global Index top 20.

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Gender Gap Assessment – Comparator Markets


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• Rwanda (6) remains the region’s top performer, despite moving down two ranks this year due to some reversal inprogress on the Economic Participation and Opportunity subindex. It is joined in the global Index top 10 by Namibia(10), which manages to narrow its Political Empowerment gender gap due to an increased share of women inparliament. South Africa (19) also registers some progress on the Political Empowerment subindex, despite a slightdecline in wage equality.

• The fourth-ranked country in the region, Burundi (31), loses nine places in 2018. Despite having closed its gender gapin primary and secondary education and healthy life expectancy, newly available data reveals a wider-than-beforegender gap in legislators, senior officials and managers as well as professional and technical workers, driving most ofthe change in its overall performance. Uganda (43) gains several ranks due to progress in healthy life expectancy andwomen in senior and managerial positions.

• Tanzania (71) slightly narrows its gender gap across a range of indicators in all four subindexes, whereas Cape Verde(72) makes progress on Economic Participation and Opportunity as well as gender parity in healthy life expectancy. Itis followed by Kenya (76), which sees modest improvements in its share of women in parliament by 2018.

• Nigeria (133) - While this is partially due to newly available data revealing a larger-than-before gender gap amonglegislators, senior officials and managers, the country also sees some reversal of past progress on EducationalAttainment and in healthy life expectancy.

South Africa

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Gender Gap Assessment – South Africa


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The payments business in South Africa continues to have significant growth and has become a key source of revenue for banks and other payment service providers.

Source: KPMG - Payment Developments in Africa

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Payments continue to move from debit pull transactions (e.g. cheques) to credit push transactions (e.g. EFT). Above are some of the keypayment trends foreseeable in the future based on current growth rates.

Kenya

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Gender Gap Assessment – Kenya


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The payments business in Kenya continues to show significant growth, specificallyin mobile money.


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• Payments continue to move from debit-pulltransactions (e.g. cheques) to credit-pushtransactions (e.g. mobile and EFT). Below, are someof the key payment trends that will drive not onlythe payments business in Kenya but also see the gapnarrowing between the banked and unbankedpopulation. Payments are likely to be the catalystthat will drive true “Financial Inclusion” in Kenya.

• In Kenya, a number of electronic payment optionsare available, these include: EFTs, ATMs, cards (debitand credit) and mobile money. Any payments, overKSh1 million are routed via the RTGS system KEPSS.The highest volume of transactions are conductedthrough M-Pesa mobile money system, while thehighest values are conducted through KEPSS. Thephysical payment options available are cash andcheques.

Nigeria

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Gender Gap Assessment – Nigeria


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Nigeria - Payments Moving from Physical to Electronic


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sResearch Findings

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Study Details – A Profile Of Those Interviewed1

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Sector/Segment South Africa Kenya Nigeria Total

Retail 43% 48% 31% 40%

Financial Services 0% 17% 14% 11%

Mining and Industrials 0% 0% 17% 6%

Manufacturing 10% 0% 20% 11%

Telecomms 0% 14% 11% 9%

Others 47% 21% 6% 23%

How old is your business? South Africa Kenya Nigeria Total

Less than 1 year 3% 3% 9% 5%

1-2 years 10% 34% 26% 23%

3-5 years 30% 38% 26% 31%

Over 5 years 57% 24% 40% 40%

Are you the highest paid earner in your household?

South Africa Kenya Nigeria Total

Yes 63% 34% 14% 36%

No 37% 28% 83% 51%

Sometimes 0% 38% 3% 13%

Base: South Africa n=30, Nigeria n=30, Kenya n=30The study surveyed women SME business owners with 2 – 15 employees

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Key Insights• Women acknowledge the role of electronic payments in business success; however most

have not moved beyond cash and mobile money except in SA where Credit Cards are more ubiquitous compared to Kenya and Nigeria.

• The women surveyed are positive about the future and feel they are financially independent; they are however reluctant to have their partners quit gainful fulltime employment.

• Overall, market competition and lack of funding are the common challenges facing businesses in Africa. SA and Nigeria also face added challenges due to regulation, fluctuating economy and lack of mentors.

• Specifically among women, lack of funding, business networks and training for growth are the key challenges to business growth.

• In Kenya and Nigeria only 30% of business women use business accounts. This may present a challenge to accessing both short and long term credit.

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Women are driven to start a business primarily to supplement their income. After that Nigeria is more driven by desire to be their own boss, Kenya by the need to help extended family and SA by unemployment & demand they perceived for their product/service.

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I was looking for a source of income that will enable me to pay for my school fees and support my family financially.

Kenyan, 26-30 year old

Nigeria, 26-30 year old

South Africa, 26-30 year old

Financial reasons, to cater for my household and make money

I needed to support my husband. He was the sole breadwinner and his health was deteriorating. So I had to start something to keep family afloat

32%

6%3%

16% 16%

10%

3%

52%

21%

3%6% 6% 6%

3%

42%

13%

19%

3% 3%6%

13%

0%

10%

20%

30%

40%

50%

60%

Supplementincome

Selfemployment

Help extendedfamily

Unemployedfor long

Demand for theservice/product

Passion forwhat I do

Work lifebalance

Motivations For Starting a Business

South Africa Nigeria Kenya

Base: South Africa n=30, Nigeria n=30, Kenya n=30

Q: What motivation did you have when you decided to become a business owner/entrepreneur?

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Women agree that accepting electronic payments is key to their business success. ‘Tap and Go’ yet to gain traction but higher in Kenya due to M-Pesa ‘1 Tap’ offer.

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Top 2 Box

(Percentage who ‘strongly agree’ or ‘somewhat

agree’)


Accepting/ receiving electronic payments improves

my overall business bottom line87% 62% 97% 83%

My customers spends more when they have access

to electronic payments vs cash73% 62% 86% 74%

My customers readily use tap and go technology 20% 31%* 11% 20%

Q: To what extent do you agree or disagree with the following statements? Base: South Africa n=30, Nigeria n=30, Kenya n=30

* https://www.safaricom.co.ke/personal/m-pesa/lipa-na-m-pesa/m-pesa-1tap

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Most women in business rely on cash transactions; mobile money is stronger in Kenya and Nigeria while credit cards are more accepted in SA.

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93%

27%

87%

17%10%

100% 97%

23%

11%

0%

97% 100%

80%

0% 0%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cash Mobile Money Credit Card Other QR Code Payments

How do you accept/receive payment in your business?

South Africa Kenya Nigeria

- Cheques- Direct transfers

Base: South Africa n=30, Nigeria n=30, Kenya n=30Q: How do you accept/receive payment in your business? Tick all that apply.

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Payments Situation in Sub Sahara Africa


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• While it is true that around 94% of all retail payment transactions (urban and rural)across Africa are still conducted in cash, central banks are now focusing on drivingdown the usage of cash and promoting electronic channels and mechanisms such ascard, mobile, POS and ATM.

• Most financial institutions, in conjunction with the card associations, chose cards astheir first strategy to reduce the value of cash transactions by promoting the use ofcards through their chosen channels (ATM, POS, Internet). To illustrate this, wehave looked at the different associations and their share of the global card market.In addition, we have also provided a view of what share (%) of global purchasetransactions are done via card as well as the related transaction values.

• In as much as banks compete for client share of wallet, card schemes compete fortheir brand on the plastic issued. In the study done by “The Nielson Report in 2012”we see the market share, world wide, of the primary card issuers (Amex; Diners;JCB; MasterCard; UnionPay & Visa).

• The shift in the balance from the previous market dominators, MasterCard andVisa, is beginning to happen as new entrants like UnionPay challenge the statusquo. In the period 2012 to 2013 Visa showed the biggest drop in market share, from62,1% to 60,5% and UnionPay showed the biggest increase from 6,0% to 7,7%. Wehave seen a greater presence of UnionPay on the continent and it will beinteresting to watch as the card schemes battle it out for Africa’s card business.

Cards Market Share – Sub Sahara Africa.

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Majority of business women feel they are financially independent and have a positive outlook for the future.

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67%

90%

57%

70%77%

85% 86% 87%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Do you think you are financially independent?

Do you feel more empowered as a female business owner than you did five years ago?

Base: South Africa n=30, Nigeria n=30, Kenya n=30Q: Do you think you are financially independent?

Q. Do you feel more empowered as a female business owner than you did five years ago?

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Financial Independence2

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For the first 2 years of the business I was

paying off my previous debts. Now I am

debt free and have been able to take

family on our first holiday ever.


I don't stress about money, I have

four salons now and from the

earnings I have managed to even

to go for holidays with my family

and my kids go to very good

schools.

Not yet. My husband has been in

and out of hospital. We have no

medical cover so the bill's are

taking a lot of money.


I always have profit on my

business on daily basis and it is

enough for me to be financially

independent.

My business is still growing

gradually and I still need more

money to expand the

business.



Because I can take care of all

necessary needs. I made

enough money through my

business and that is why I don't

depend on anyone for money.


Because I make decisions

concerning my businesses in

terms of growth and expansions

Kenya, 26-30 year old

I can now cater for my

children and some other

family members who

depend on me

Kenya, 41-50 year old

My expectation for my

standard of living is a bit

higher and I still cannot afford

it so am still living at home.

Kenya, 18-25 year old South Africa, 41-50 year old

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Even with the positive outlook women are reluctant to have their partners quit their current gainful employment.

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29%24%

4%

54%

20%

88%

18%

56%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Partner quitting current gainful employment

Yes No I don't know

Q: Will your partner be open with quitting their current gainful employment?

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Challenges of doing business in Africa are market competition and lack of funding; while SA and Nigeria struggle more with regulation, fluctuating economy and lack of mentors.

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87%

77%80%

70%73%

60%

30%

13%

93%

73%

50%

43%

33%30%

17%13%

86%

74%

60%63%

29%34%

46%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Market competition Lack of funding The fluctuatingeconomy

Knowledge/mentors Regulatoryconstraints

Work life balance Lack of technologicalinfrastructure

Other. Please State.

Challenges Experienced as a Business Owner?


Base: South Africa n=30, Nigeria n=30, Kenya n=30Q: African businesses face unique challenges. Which of the below pain points do you experience as a business

owner? Tick all that apply.

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Business challenges……….

(AFRICA) Market Competition: African countries have much to gain by encouraging open and competitive markets, particularly as a means to spur sustainable economic growth and alleviate poverty. Yet in reality, many markets have low levels of competition. More than 70% of African countries rank in the bottom half of countries globally on the perceived intensity of local competition and on the existence of fundamentals for market-based competition. There are gains to be made from tackling anticompetitive practices and reforming policies to enable competition. For instance, reducing the prices of food staples by just 10%, by tackling cartels and improving regulations that limit competition in food markets could lift 500,000 people in Kenya, South Africa, and Zambia out of poverty and save consumers more than $700 million a year. Source: https://www.worldbank.org/en/news/feature/2016/07/27/africa-competition

(KENYA) Lending to SMEs declines with the introduction of interest rate caps: interest rate caps on the Kenyan Economy have led to a reduction of the number of loans going to SMEs. Banks are lending to the less risky segments of large established firms, personal loans – which are secured by pay slips – and government bonds. The Banking Amendment Act in September 2016 that set the maximum lending rate at no more than 4 percent above the Central Bank base rate. Source: https://www.capitalfm.co.ke/business/2018/04/interest-rate-caps-cause-more-harm-to-smes-economy-cbk-study/

(AFRICA) Fluctuating Economy: While Nigeria grew faster in 2018 than in 2017, thanks to a modest pick-up in the non-oil economy, South Africa came out of recession in the third quarter of 2018, but growth was subdued mostly due to policy uncertainty weakening investor confidence. Growth performance was mixed in 2018 across the rest of the continent. Source: https://www.worldbank.org/en/region/afr/publication/taking-the-pulse-of-africas-economy

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https://www.worldbank.org/en/news/feature/2016/07/27/africa-competition

https://www.capitalfm.co.ke/business/2018/04/interest-rate-caps-cause-more-harm-to-smes-economy-cbk-study/

https://www.worldbank.org/en/region/afr/publication/taking-the-pulse-of-africas-economy

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Specific challenges women doing business in African face include lack of funding, business networks and training for growth.

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90%

70%67%

30%

37%

77%

57%60%

20% 20%

74%77%

54%

43%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Access to funding Business support networks Training for growth Social Norms Others

Challenges Facing African Business Women


Base: South Africa n=30, Nigeria n=30, Kenya n=30Q: As a female business owner what have been the main challenges to owning your business? Tick all that apply.

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Low usage of business accounts in Kenya and Nigeria. Is this a key driver in lack of access to business credit?

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100%

87%

77%

65%

30%

65%

12%

29%

94%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Personal Account Business Account Savings Account

Type of Accounts



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Nigeria business women have lower access to credit compared to South Africa and Kenya.

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33%

67%

South Africa

30%

70%

Kenya

6%

94%

Nigeria

Do you have a credit facility with your bank?

30%40%

30%

14%

29%

57%

0% 0%

100%

Overdraft Credit card Loan

Type of Credit

South Africa Kenya Nigeria * Read With Caution – small bases

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[email protected]

4SiGHT Africa Research & AnalyticsDaykio Plaza, Off Ngong Road, 2nd Floor,

Office 2.4, Nairobi, Kenya.

Thank You

Contact: Caroline Maina [email protected] +254 722 797 446 Charles Wanga [email protected] +254 721 633 810Pauline Mwatu [email protected] +254 723 408 970

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