Susan Moloisane | CEO | Edge Growth Solutions | mail me |
Supporting female entrepreneurs isn’t just a moral imperative, it’s also a business opportunity. Numerous studies show that women-led businesses are often more capital-efficient, demonstrate higher returns on investment and foster inclusive team cultures.
In 2018, the Boston Consulting Group (BCG) found that women-led startups deliver more than twice as much revenue per dollar invested compared to those led by men. A Forbes report from 2019 reinforced this finding. It showed that private technology companies led by women are more capital-efficient. These firms achieve 35% higher ROI and, when venture-backed, 12% higher revenue than startups run by men.
Closer to home, additional studies underline this reality. The Small Enterprise Development Agency and Global Entrepreneurship Monitor South Africa highlight that the tenacity and resilience of many women entrepreneurs enable them to adapt quickly, innovate and sustain their businesses despite challenges. This underlines the importance of supporting women entrepreneurs as they navigate systemic barriers.
Persistent hurdles
Women remain underrepresented in South Africa’s SME sector. According to the Small Business Report 2021, only 21.1% of formal SMEs are owned by women. The Mastercard Index of Women Entrepreneurs echoed this figure. It reported a small increase to 21.9% in 2021, up from 21.1% the year before. However, broader data reveals a more nuanced picture.
When including informal enterprises, women’s ownership rises to around 38%. This highlights a significant presence in less formal segments of the economy. These figures reflect what we have seen on the ground. While informal sector inclusion increases the representation of women, the low percentage in formal, growth-oriented SMEs remains concerning.
Progress is happening, but slowly. Systemic challenges for women entrepreneurs persist. These include limited access to collateral for loans, unconscious bias in funding decisions, and exclusion from traditional business networks. Women also often operate in lower-margin industries. At the same time, many balance business growth with caregiving responsibilities.
While there is greater awareness and some improvement in mentorship availability, access to capital and large-scale markets remains a significant hurdle. There are also more initiatives focused on women entrepreneurs. However, we are still far from where we need to be.
Many programmes are gender-neutral by design. This unintentionally means they fail to address the unique barriers women face. More targeted funding instruments, mentorship models and procurement policies are needed to shift the dial and strengthen efforts in supporting women entrepreneurs.
The case for gender-smart investing
Female entrepreneurs are more likely to reinvest in their communities, create inclusive jobs, and build sustainable businesses. We see this repeatedly within the our ecosystem. Women-led SMEs often prioritise impact as well as profit.
Many of these women are deeply embedded in their communities. They employ locally, mentor other women and build businesses rooted in strong values. It is common to find women entrepreneurs reinvesting in education, social development or team upskilling. This mindset often produces more resilient, inclusive and long-term sustainable enterprises.
When corporates and funders invest in women, they unlock a multiplier effect. The benefits include stronger communities, more resilient supply chains and sustainable economic growth.
The private sector has a pivotal role to play here. Corporates can embed gender-smart procurement targets, create pathways for women-led businesses to enter value chains and support incubators tailored for women. Investors can also adopt gender-lens investing strategies. These strategies recognise that diversity is not a risk but a return-enhancing factor. The key is to move beyond compliance toward real commitment. In this context, supporting women entrepreneurs is not only fair but also smart economics.
Shining examples of resilience, innovation and impact
Of the many inspiring stories that embody the resilience, innovation and impact of women entrepreneurs we have supported, two examples stand out.
The first is a Black woman-owned independent financial advisory firm. When we first engaged with the business, it was a high-potential enterprise. The owner wanted to position herself more competitively in a male-dominated industry. Through targeted enterprise development support, ranging from strategy refinement to market access interventions, the business has grown significantly. Today, it is a formidable player in the financial services sector. It serves a wide range of clients and stands out for professionalism, expertise and a commitment to financial inclusion.
The second is a Black woman-owned motor body repair facility based in Mabopane township in Tshwane. The owner’s business suffered a devastating setback when a severe storm wiped out her operations. Instead of walking away, she rebuilt and transformed her business into a state-of-the-art facility that meets the highest industry standards. With our support, she accessed development services and mentorship. Today, her facility is thriving, creating jobs and challenging perceptions about where excellence in automotive repair can come from.
These and many other stories demonstrate courage, grit and what is possible when women entrepreneurs receive the right support to thrive.
Where to from here?
A decade ago, women entrepreneurs were far more underrepresented. They were often overlooked in business forums, investment conversations and development initiatives.
Today, the room looks different. It is more diverse, and more women are stepping into entrepreneurship with confidence, particularly in high-growth sectors. However, while representation has improved, systemic support has not caught up with the pace or potential of women-led businesses.
Women-owned SMEs represent a vast and underleveraged engine of economic growth. Unlocking this potential could contribute significantly to GDP, employment and poverty alleviation. If more capital, procurement opportunities and scalable support were directed toward women entrepreneurs, the gains would be enormous.
We would see not only stronger economic outcomes but also broader social transformation across education, health, and community development. The marginal improvement over the years points to progress that is still too slow. Encouragingly, the visibility of the issue is growing, and commitment from ecosystem players is increasing. Yet what is needed now is more action, not just awareness.
