Access to Finance for Women Entrepreneurs in South Africa: Challenges and Opportunities

This paper addresses the key issues behind improving women's access to credit in South Africa
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This paper examines the issue of access to finance for black women in South Africa. It lists out the factors that hinder women entrepreneurs to access finance. Drawing data from an earlier study, the paper presents a series of statistics that reinforce the fact that:

  • Black women are the largest self employed group of the population;
  • The reach of financial services to black women is lower than to white women;
  • Women are actively participating in the new emerging service industry.

The paper lists some of the obstacles for women's access to finance:

  • Poor understanding of financial terminology and lack of awareness of bank and microfinance services;
  • Lack of awareness of development finance;
  • Need for financial confidence;
  • Lack of appropriate product.

The paper further states that financial institutions fail to acknowledge the huge market opportunity that the black women represent. To this end, it makes recommendations on the following fronts to improve women entrepreneurs' financial access:

  • Review policy initiatives; industry charters need to include gender-specific financing targets.
  • Financial institutions require information dissemination, understanding staff, developing comprehensive capacity-building strategy for women.
  • Business development services should be structured to include more women mentors and advisors.
  • Women's better repayment records should be demystified and made public by the credit bureaus.

About this Publication

By IFC, FinMark Trust & Department of Trade and Industry, Government of South Africa