In the last few decades, gender issues have dominated the global development agenda, with stakeholders calling for an end to gender disparity. Across the world, governments and other players in private and development sectors have made deliberate efforts to address the burgeoning concern of gender inequality through policies and other gender mainstreaming interventions.
At the very top, the United Nations (UN) recognizes gender equality as a human rights issue and a means to a “peaceful, prosperous and sustainable world”. To this end, stakeholders continue to rally behind a just society under the auspices of Sustainable Development Goal (SGD) 5 on gender equality.
Addressing gender inequality often places a strong emphasis on girls and women because they face greater challenges in realizing equal opportunities. Many cultures, societal expectations and biases have historically limited the access of women and girls in critical areas such as education, healthcare, entrepreneurship and leadership, thus hindering sustainable development. As such, global events such as International Women’s Day (IWD) seek to amplify women’s voices, raise awareness about gender inequalities, and perhaps more importantly, influence different actors to promote women’s inclusion in socio-economic development.
Gender Equality and Socio-economic Development Nexus
There is evidence that women’s inclusion is directly proportional to socio-economic development. For instance, in agriculture, the Food and Agriculture Organization (FAO) estimates that women in developing countries produce between 60% and 80% of the food and contribute significantly to household and national food security. In business, UN Women found that organizations with three to four women in their senior leadership recorded higher organizational performance and increased organizational growth than those without.
Despite this evidence, women are still remarkably underrepresented in critical areas such as entrepreneurship, particularly in the formal sector, and face challenges in their quest for business funding. Big Data Africa, a platform that tracks startup funds, reported that only a small fraction of the funding raised by African startups went to female-founded and female-led start-ups in Q1 of 2024, with 85% of the funding going to ventures without a single female founder and 92% to companies with a male CEO.
World Bank data indicate that female founders are underrepresented in the sectors that attract the most financing. This underrepresentation is partly because there are more male than female founders. Female founders are also more likely to operate in subsectors that attract less investment. However, even when they work in sectors with high investor interest, all-female teams are still less likely to receive financing than all-male teams, and they often receive significantly smaller amounts. These disparities, according to TechCrunch Disrupt New York, arise from the different questions investors pose to male and female entrepreneurs. For instance, the research found that 67% of questions directed at men focus on positive aspects like growth plans and milestones, whereas 66% of those directed at women center on risk management and break-even timelines. This focus on potential pitfalls and risks translates into women entrepreneurs receiving seven times less funding than their male counterparts.
The upshot of these statistics is that many women entrepreneurs fail to access the required resources to scale or formalise their businesses. In Kenya for example, the women entrepreneurs stagnate in the informal sector as micro retailers, mamba mbogas, farm labourers, tailors and operators of small food courts known as vibandas, all of which have limited growth and impact potential.
Investing in Women Entrepreneurs
Early this year, Nairobi hosted the 11th edition of the Sankalp Forum, an annual continental gathering of social entrepreneurs, investors and entrepreneur support organizations, where gender disparity in entrepreneurship was identified as a key stumbling block to the development of Africa. Central to the discussions was the need for investors to adopt gender lens investing to create more opportunities and spaces for women to offer solutions to the challenges facing the continent.
Investing in women has historically been viewed as having just social benefits. This perception fails to recognize the economic benefits that women-led and women-owned businesses have on families, communities and the economy. For instance, studies show that women entrepreneurs demonstrate more resourcefulness than their male counterparts despite being comparatively underfunded. They can achieve comparable results with less capital, often reinvesting their incomes back into their businesses and communities.
Nyota Limited, supported by Kua Ventures, is a great example of a woman-owned business whose impact has both social and economic dimensions. Acknowledging the gendered care norms that burden women as family caregivers, the founder – Florence Mogere, introduced easy-to-cook and nutritious frozen vegetables to help women juggle between work and family. By making healthy eating easier, Nyota Limited enables women to give their families nutritious meals without sacrificing or compromising their careers. Nyota thus tackles a real social problem that has economic ramifications.
Businesses and entrepreneurs can also gain immensely from elevating women to leadership positions in their organizations. Research shows that the involvement and participation of women in organizational leadership makes decision-making effective, as there is a diversity of thought and sight of needs and preferences of women consumers, who account for more than 50% of the country’s population and possess immense purchasing power. In other words, elevating women to leadership positions is not only a matter of equity and inclusion but also a strategic business decision.
Kua Ventures’ Approach to Supporting Women Entrepreneurs
At Kua Ventures, although we do not apply a gender lens in our investments, we are intentional about supporting women-owned and women-led entrepreneurs through our 3C model of Capital, Coaching and Community. This approach puts great emphasis on the entrepreneur and the social impact of their enterprise, and has resulted in a strong and almost balanced portfolio with a 3:2 ratio of male to female entrepreneurs among the 22 businesses.
Besides Nyota Limited, Kua Ventures’ women-owned portfolio businesses include JEILO Collections which manufactures leather items, Toolkit iSkills which builds the capacity of vulnerable youth and women on organic farming and climate-smart agriculture, Zydii which provides virtual training and digital learning solutions for Kenyan businesses to upskill their workforce, Pelacca Brands which manufactures candies, and Savannah Space which makes customized furniture and decor for homes and offices.
By supporting the founders of these enterprises with the resources to grow, Kua Ventures continues to contribute to the growth of local entrepreneurship while fostering inclusion and economic prosperity.