The Reasons Why There Are Less Women in Business
We are in the month of women; International Women’s Day and Mother’s Day. And it’s all about sorting out ways to empower women and pressing for progress.
To celebrate International Women’s Day, I was opportuned to attend the SME 100 conference themed: “ The Future of the Female Economy.” It was very educative and interactive; I learnt a whole lot. So, here is me sharing a few of the numerous things I learnt at the programme.
Barriers for Women
These are the hindrances most women have that prevent them from being able to venture into any business of their choice.
Culture
Culture plays a significant part in the female empowerment. For instance, in the Southern part of Nigeria, more women are empowered compared to the Northern part where there are hardly women in business.
Poverty
In a situation where there are limited resources to send all the children in a family to school, it is most likely that the education of the male child is catered for at the expense of the female child. Although, it is not bad as it used to be, but in this case, the female child is deprived of her chances to explore and put her potentials into good use.
Marital Status/ Family Issues
It is sometimes difficult for a woman with a family to focus on her business, especially if it is highly demanding and time consuming, as she is expected to take care of the home. Today, we have a lot of women in high places doing extraordinary things. On the other hand, not all women are lucky enough to have supportive husbands who can help motivate and help them succeed in their various businesses.
Challenges
High cost of doing business in Nigeria
This is not just applicable to women entrepreneurs.
Low access to Financing
This is one of the major challenges entrepreneurs experience in general. There are great business ideas but no funding.
Technologically Challenged
Technology advances day after day and some women are left behind. It is important that women are in the know about modern day technology and how it can be used to grow their business. As it is, businesses are going online; engaging both online and offline strategies.
Lack of Collateral
Having a collateral is one of the crucial steps to securing loans in banks. This could be difficult, as a woman, as a result of lack of collateral. An average Nigerian woman barely has properties in her name. This is because it is uncommon for a woman to inherit properties or for a property to be bought in her name.
“Never listen to anybody who tells you, you can’t do it. You know you can so just get on with it.”
— Margaret Hirsch
What should be done differently?
Capacity Building
This is a training women need to go through on how to run a profit business. This training will cover business and financial aspects such as profit and loss statement, balance sheet, asset conversion cycle, difference between cash flow and profit, spontaneous financing, etc.
Focus on your Business
Consistency is one of the keys needed to be successful in one’s business. Often times, entrepreneurs do one business today, and the other, the next; as a result of the initial business not thriving as imagined, so they move on to something else. This shows a lack of focus and reliability.
Focusing on your business is to stick with your choice when it’s booming and when it’s dry. This way, you are known for a particular brand and being consistent.
Mentoring
Your mentor needs not be a woman. Get a mentor who will help you along the way. Mentors help in accelerating your way towards achievement by linking you up with the right people and giving quality advice based on their own personal experiences.
As said earlier, one of the challenges womenpreneurs face is access to funds/loans. To address this, certain points were given on what a banker wants before you can be granted a facility.
Governance Structure
One of the things most SMEs lack is structure. When the ownership structure or the board of directors is checked, especially for a female-owned business, the Chairman of the company is likely to be the her husband, the MD will be the woman herself, the Director, her son. Hardly will any bank see this and grant the business a loan. The reason being a lack of independence, that is, the business and the family should be handled separately. In this case, the board room will likely be the sitting room.
Financial Control/Discipline
Professionals should be appointed to handle your finances. This will ensure a steady flow of financial statements which is needed to secure loans. And you must be able to repay your debt.
Track Record
A track record shows all the financial activities an organization has done in the past, which shows how good they are at doing their job, dealing with problems etc.
General requirements are:
A minimum of 3 years in business before getting a loan from a bank.
You must have operated your account in the bank for no less than 6 months.
No bad loans in any bank.
Audited account signed by a credible accounting firm.
Your business must be profitable.
Your financing request must be sound and realistic and not speculated.
Banks do not finance ideas.
Alternative sources of funds:
CBN has an SME fund which you can get from any bank. The total fund is 220 billion naira, 60% of it is reserved for women. The maximum amount is 50 million, the tenure is 5 years and the rate is between 9% and 15%.
The Bank of Industry has various funds.
Many thanks to Mrs. Foluke Aboderin for sharing her insights on how womenpreneurs can tackle the challenges they face in their various businesses.
