Facebook, The World Bank, and the Organisation for Economic Co-operation and Development (OECD) have published Future of Business – a collaborative study which takes a look at women-owned businesses in the small business sector.
The organisations surveyed nearly 32 000 workers from small business in 42 countries between December 2017 and January 2018.
The findings from the survey reveal that in North America the number of female entrepreneurs is close to the number of male entrepreneurs (47 percent and 53 percent respectively) but, in other parts of the world, the gap is much wider.
In Nigeria and South Africa, for instance, only 36 percent of entrepreneurs are female. In Egypt (which was curiously excluded from African statistics and placed under “Middle East”) and Israel only 26 percent of women own businesses.
Women are also more likely to operate a small business on their own -55 percent of female entrepreneurs are the sole employee in their business compared to 36 percent of men.
Where women do employ more people they employ less than men in most cases except the ICT sector.
“The mean firm size for male-owned businesses operating in social services is 8.1 employees, more than twice the size of the average 3.8-employee sized firm owned by a woman,” reads the report.
The inequality doesn’t end there sadly. While 70 percent of small business owners (both genders) secure funding for their funding through personal savings, women have a harder time securing capital from external sources.
For example: only 16 percent of female respondents said they were able to secure funding from a bank compared to 22 percent of men. In terms of venture capital women are less likely to secure funding by as much as three percentage points compared to men.
In Africa and Nigeria, however, the opposite is true. Women are more likely to secure funding from a bank than men but the gap is as close as one percentage point.
“Our results suggest that while the gender gap in access to financing among small business around the world persists, there is much that policymakers, banks and training institutions can do to begin to close this gap,” say the authors of the study.
These measures include closing the divide in lending between male and female entrepreneurs, and addressing cultural issues that discourage or outright prevent women from securing bank loans.
Having more women be able to access financial resources might encourage these business owners to expand and scale their businesses from one woman operations to larger companies that in turn stimulate the economy.
You can find the full results of the Future of Business survey.
[Image – CC 0 Pixabay]