South African women are starting businesses at almost the same rate as men, but far fewer women-owned-enterprises survive beyond the early stages of entrepreneurship.
Data from the Global Entrepreneurship Monitor South Africa showed that only 4.1% of women aged between 18 and 64 are running established businesses, compared with 7.9% of men.
The gap points to one of the country’s most persistent entrepreneurship challenges: women are entering the business economy, but too many are unable to sustain and grow their enterprises once they move beyond the start up phase.
The issue is not simply one of entrepreneurial ambition or capability. Instead, women business owners continue to face barriers around access to finance, procurement, business networks, compliance, safety and childcare, all of which can make it harder to move from a small enterprise into a sustainable and growing business.
The economic cost of this attrition is significant. Research by Citi estimates that closing the gender gap in business growth could add between $1.6 trillion and $2.3 trillion to global gross domestic product and create as many as 433 million jobs.
Finance remains a major barrier
The reasons women give for closing their businesses also differ from those cited by men.
According to Global Entrepreneurship Monitor South Africa exit data, personal and family matters account for 21.5% of women's business exits, compared with 12.1% of men's. Difficulty obtaining finance accounts for a further 21.5% of women's exits, compared with 17.8% for men.
Gugu Mjadu, Executive General Manager: Marketing and Impact Investing at Business Partners Limited, said the barriers often have little to do with the quality of the business itself.
"Investor and procurement decisions still run on assumptions about who looks like a safe bet," Mjadu said.
For women who have already built established businesses, those assumptions can persist for years.
Lomo Senoamadi, founder of Bashumi Instruments & Control Services, a laboratory instrumentation firm established in 2003, said questions about whether she is genuinely responsible for the technical side of the business continue to arise.
"It is not once, in one meeting. It happens repeatedly, over years, in different forms. More often it arrives as a question about who handles the technical side, as though the woman named on the B-BBEE certificate and the person running the business cannot be the same person. It puts you on the defensive in a meeting where you should be discussing the client's problem," Senoamadi said.
Wendy Dlomo, founder of hospitality and property business The Living Collective, said she experienced similar pressures when seeking finance during the early stages of her business.
"Applying for financing early in my journey required me to over prepare just to be considered," Dlomo said.
"My male counterparts would walk in with half the documentation and twice the confidence, and somehow that confidence was often interpreted as credibility."
The cost of growing a business
For women entrepreneurs in industries such as construction, access to finance can determine whether a business is able to take advantage of a new contract.
Feziwe Mpaku, founder of Independent Girls Business Enterprise, said small businesses can struggle to secure funding quickly enough to meet project requirements.
"When you're young, and you get an opportunity or a project, nobody is willing to lend you money. Some government institutions have long turnaround times, and your client doesn't have that time to wait for you," Mpaku said.
"We don't come from families where you can just borrow money, so you end up going to places where the interest is higher, and that eats into your profits."
The problem can extend beyond access to capital to the cost of remaining compliant.
"Compliance costs land hardest on the smallest businesses, because a five person firm carries much the same administrative load as a large one without the staff to absorb it," Mjadu said.
For Mpaku, compliance can also determine whether a small business is able to compete for work.
"You have this huge amount of money that you need to pay towards compliance, and if you're not compliant you can't do a lot of jobs. It has become a gatekeeper in terms of opportunities," she said.
Networks can determine who gets the opportunity
Access to business networks is another factor influencing whether women owned businesses can move into the next stage of growth.
Mjadu said many of the networks responsible for opening doors to larger opportunities remain dominated by men.
"The networks that move a business from small to medium remain largely male, so women work without the introductions their competitors get as a matter of course," she said.
Samantha Skyring, founding CEO of Oryx Desert Salt and the 2024 Small Business Entrepreneur of the Year, said she had experienced the impact of these networks first hand.
"I suspect finding investors would have been easier, or at least getting myself introduced and connected to potential investors would have been easier. There was one particular crowd of investors a colleague of mine knew about, but never mentioned to me. Would they have done an introduction if I were a man?" Skyring said.
The issue illustrates how business growth can depend on relationships and access to decision makers as much as the quality of a product or service.
The challenge does not stop at the office
For women entrepreneurs, the pressures of running a growing business can also intersect with responsibilities outside the workplace.
Mjadu said childcare should be considered part of the economic infrastructure required to support entrepreneurship rather than simply a welfare issue.
Dlomo described the pressure of balancing business growth with expectations around family and personal responsibilities.
"There is a constant negotiation between ambition and everything else life expects of you. I've taken calls at 10 p.m. about property issues and felt guilty for being unavailable, while simultaneously feeling guilty for being on the phone. Men are rarely made to feel that their ambition comes at the expense of their identity," Dlomo said.
These pressures can become more pronounced as businesses grow and founders take on larger teams, more complex contracts and responsibilities across multiple markets.
Building a more resilient economy
The challenge of retaining women owned businesses also has implications for South Africa's broader economic ambitions.
The issue aligns with this year's Women's Month theme, "Building Resilient Economies for All", with entrepreneurs arguing that supporting women owned businesses should be viewed as an investment in jobs, skills and communities.
"Building a resilient economy means investing in building the skills here rather than importing them," Senoamadi said.
Skyring also highlighted the role women can play in supporting one another as they navigate the challenges of entrepreneurship.
"Let's first learn to value ourselves. When we lift each other up instead of competing with each other, we all become stronger, and so do the businesses, communities, and economies we're building together," she said.
South Africa's challenge is therefore not simply to encourage more women to start businesses. It is to create an environment in which those businesses can survive, secure funding, access networks, win contracts and grow into established enterprises.
ashley.lechman@nationalmg.co.za