Supporting women entrepreneurs

Mai Ghandour, Tuesday 7 Jun 2022

More efforts are being made to break down barriers faced by female entrepreneurs in Egypt, but funding remains a matter of concern,.

Supporting women entrepreneurs
Supporting women entrepreneurs


According to a report by the Boston Consulting Group, a US management consulting firm, access to funding is unequally distributed among female and male entrepreneurs worldwide, further widening the gender gap in the entrepreneurial ecosystem.

Female-led companies received just three per cent of global start-up funding in 2019, while only two per cent of venture capital deployed globally went to female-owned businesses, the report said. The rest has been primarily reserved for male business owners.

The report suggests that integrating women further into the economy would boost global GDP by some US$5 trillion. However, for this to become reality, action is needed from different groups in society, including financial institutions, nonprofit organisations, and corporations.

Things are changing, however, and the private sector in many countries is playing a significant role in facing this predicament, with banks and financial institutions stepping up to support women in business and cater to the financial needs of female entrepreneurs.

British multinational bank HSBC announced the launch of a Female Entrepreneur Fund on 17 May worth $1 billion to finance female-led businesses in 11 markets, including Egypt.

The fund aims to address the challenges and bias that female leaders face, Sam Cooper-Gray, head of market strategy at HSBC Business Banking, said in press release, adding that the recent impacts of the Covid-19 pandemic had further skewed an already unbalanced market.

According to Crunchbase, a platform for business information about private and public-sector companies, funding for female-founded startups globally has been slashed by 27 per cent due to the pandemic.

“The level of funding received over time by female-led businesses is significantly lower than male counterparts, while the recent impacts of the pandemic have seen these same businesses disproportionately affected,” Cooper-Gray said.

HSBC has also introduced an initiative enabling female entrepreneurs to access masterclasses hosted by experienced business leaders, tailored networking sessions with major companies, insights from investors and the opportunity to pitch to angel investors, and a bespoke advisory for female entrepreneurs.

Meanwhile, the European Bank for Reconstruction and Development (EBRD) has allocated $5 million under an EU-supported facility, the Women in Business (WIB) Programme, to expand access to finance for women-led small and medium-sized enterprises (SMEs) in Egypt.

This comes under a financing package worth $25 million announced on 19 May to support SMEs in Egypt. The package includes business advice and training for female-owned SMEs.

The EBRD earlier said that it would also provide a senior debt facility of $20 million to the Commercial International Bank (CIB) dedicated to lending to private SMEs led by women in Egypt. It will give the final greenlight for the facility on 9 June.

Many banks now have quotas to fund SMEs as well as women-led businesses, which helps explain why funding female entrepreneurs is now taking centre-stage, director of the Centre for Entrepreneurship and Innovation at the AUC School of Business Hala Barakat told Al-Ahram Weekly.

In March, a regional call for proposals in three African countries, namely Egypt, Tunisia, and Senegal, kicked off under an investment mechanism created by German Development Bank KfW dubbed the Facility Investing for Employment (IFE) with the aim of focusing on women in business.

Only businesses that are majority-owned by women, with women as majority management, with majority employment of women, or whose services and products are primarily in demand by women, are qualified for a grant from the IFE.

Barakat said that the centre she directs at the AUC has a role to play in implementing capacity building, training, and education to help empower Egypt’s women entrepreneurs.

Although there may still be culturally embedded stereotypes about women applying for loans to open businesses, this is slowly changing, backed by directives from the Central Bank of Egypt (CBE). “Now when we do programmes related to women, several banks approach us to reach out to these women,” Barakat said.

The AUC Centre, an NGO, depends on external donors and funds, Barakat said, explaining that through these it designs human-centric programmes that cater to different socioeconomic backgrounds.

Some donors want to target certain governorates or certain profiles of women, and as a result each programme is tailored to its own objectives. For instance, women-empowerment programmes in underprivileged communities vary from those targeting university students or graduates.

Rabeha, the Arabic for “winner,” is one programme providing women in Egypt with the means, knowledge, and confidence to harness their potential either as entrepreneurs, early-stage businesswomen, or as paid employees.  

The Rabeha programme, run jointly by the UN Industrial Development Organisation (UNIDO) and UN Women, aims to significantly boost women’s economic empowerment in Egypt by mid-2024. It is funded by Global Affairs Canada and is being implemented in partnership with the National Council for Women, the Ministry of Trade and Industry, and the Micro, Small and Medium-Sized Enterprises Development Agency.

In line with the Egypt Vision 2030, the joint programme aims to increase the economic participation of at least 6,300 women in Egypt’s private sector across growth-oriented sectors in seven governorates.

Although the number of women in business is still lagging, the informal sector includes many female workers and breadwinners that are not accounted for in the official figures, Barakat said, though even including these women the gap between men and women in business is still wide.

One of the AUC Centre’s research projects found that most programmes for women entrepreneurs had a maximum age limit of 35. “We recommended that the age limit be extended to reach a wider target,” Barakat said, stressing that women aged between 40 and 50 years old or more could be excellent businesswomen.

However, gender biases still persist in the process of funding. For instance, some women reported that when they pitched to venture capital (VC) or angel investors, they were asked gender-related questions to assess how much they would be committed to the business, Barakat said.

Menna Shahin, co-founder of TeKeya, a food waste management startup, told the Weekly that access to funding was not easy. To find the right sponsor, one should always be prepared with the data and traction, showcasing the product-market fit, she said. Because most founders are males, females go through extra scrutiny and their chances of succeeding are slimmer, she says, adding that one needs to test the product in the market and show that it is scalable. She believes that institutions just need a leap of faith, because otherwise, many people fail to have funding as a result.

Entrepreneur, author, and interior designer Heba Shunbo commented that “as women, I think we still face some stereotypes in Egypt — that we can’t be as dedicated as men when we’re mothers, or that we need to be more aggressive to be able to push the business forward.”

According to research analysing video transcriptions of 189 question-and-answer sessions, businessmen and businesswomen were asked entirely different questions by investors when pitching their startup ideas. For example, men would get asked, “how do you plan to monetise this?” while women would get asked, “how long will it take you to break even?”

For this reason, women founders began seeking out VC firms with women at the table. According to a report by Wamda, a platform of programmes and networks that aims to accelerate entrepreneurship ecosystems across the Middle East and North Africa (MENA) region, Flat6Labs, which has at least one female founding member, was highlighted last November as pouring the most investment into women’s businesses.

Flat6Labs is a leading seed and early-stage venture capital firm in the MENA region.

The way forward is to increase awareness and push women to establish their own startups, Barakat said. Women often have multiple responsibilities, and they may be obliged to go out of business because of family obligations. “Our role is to give them technical, financial, and moral support to continue their journey,” she concluded.

Shunbo, a co-founder with her three sisters of the business Four Fat Ladies, said that “we must work harder to prove our relevance, as a simple setback can unravel all of our hard work over the years. The mindset is more geared towards men in this part of the world, and your authority is always being questioned as a result. Women are not taken as seriously as men, so we need to impose ourselves more and hustle more to be heard and respected.”

*A version of this article appears in print in the 9 June, 2022 edition of Al-Ahram Weekly.

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