Women empowerment serves as the bedrock for growth and prosperity in any society. By empowering women economically, there is greater opportunity for inclusive and sustainable economic growth and development.
Across the world, entrepreneurial-minded women have continued to express solid determination to break into and become a success in today’s competitive business landscape. Indeed, women participation in Nigeria has improved remarkably in recent years.
Last year, Nigeria was ranked among the top ten African countries with high percentage of female-owned businesses, according to the Mastercard Index of Women Entrepreneurs, which offers insights into the enablers and constraints of female business owners globally. Policy actors in Nigeria are increasingly becoming conscious of the pivotal role of women in socioeconomic development process, evidenced by the proliferation of women-specific intervention programs at national and sub-national levels.
Women contribution to economic activities with focus on job creation is quite significant. A survey conducted by the National Bureau of Statistics in collaboration with the Small & Medium Enterprise Development Agency of Nigeria (SMEDAN) revealed that out of 59.6 million jobs created by MSME operators in year 2017, female entrepreneurs were responsible for 26 million jobs equivalent to 43% contribution compared to 57% contribution by their male counterparts.
Similarly, a recent survey by the Lagos State Employment Trust Fund (LSETF) to understand the drivers and dynamics of job creation within the MSME eco-system unveiled that female operators contribute as much as 35% to employment generation in MSME eco-system in Lagos State.
While business operators in Nigeria are generally confronted with multiple constraints in the business environment such as inadequate funding opportunities, manpower challenge, poor infrastructure, unfavorable government policies and high operating costs, female business operators are even more impacted by these headwinds. More so, female-owned enterprises face a higher risk of business mortality compared to male-owned ventures as limited access to opportunities weaken their capacity to absorb shocks during periods of economic adversities.
Access to finance is often considered as a major barrier to female entrepreneurial development in Nigeria. The struggle to raise business funds is not new to start-up owners, but this problem is more peculiar to women entrepreneurs. MSME face an annual funding gap of about N617 billion, according to PwC Nigeria’s estimate, of which female-owned businesses are more affected by limited access to funding and investment opportunities.
Key barriers include lack of bankable collateral – as tradition would seldom cede property rights to women; coupled with absence of credit histories – because most women-owned businesses are not formalized. The fact that women have fewer access to assets affects their ability to explore credit opportunities. Another limitation bothers on biased lending practices that emerge when financial institutions consider them inexperienced and therefore less attractive for funding, or when institutions lack the knowledge to offer products tailored to women’s preferences.
How LSETF is bridging the funding gap for women entrepreneurs
Recognizing that greater participation for women in business is vital not only to economic recovery but to societal advancement for all, Lagos State Employment Trust Fund (LSEFT) is at the forefront of bridging finance gap for women entrepreneurs in Lagos through its Women Entrepreneur Fund (W-initiative) loan scheme in partnership with Access Bank Plc. The facility comes at a highly competitive interest rate of 10% per annum with a maximum tenor of 24 months.
The intervention is aimed at providing financial support to female business owners in the state in a bid to foster business expansion in Lagos.
The facility is open to female business owners in Lagos State across three components:
- Microenterprise start-up loan (N50, 000 – N250, 000) – available to female Lagos residents in need of capital to establish a business venture.
- Microenterprise loan (N50, 000 – N500, 000) – available to female entrepreneurs whose businesses have been in existence between 6-12 months.
- Small & Medium Enterprise Loan (N500, 000 – N5 million) – available to female entrepreneurs whose businesses have been in existence for more than one year
For further information about this intervention, click https://lsetf.ng/content/msme-loan-programme
Concluding Thoughts
Stimulating financial support for women would increase the number of new businesses, which in turn, boosts economic activities, enable expansion of existing businesses, leading to improvement in productivity and growth.
Empowering female entrepreneurs is a critical challenge which calls for constant review of policy priorities, commitment of adequate financial resources and design and effective implementation of women-specific intervention programs.
