Africa’s future is entrepreneurial, and women are at the forefront of that movement. The continent boasts some of the highest rates of female entrepreneurship globally. In Sub-Saharan Africa, 26% of adult women are engaged in entrepreneurial activity — the highest percentage of any region in the world. The economic impact is equally impressive, with female entrepreneurship contributing an estimated $250 billion to $300 billion to African economic growth in 2016 alone (Roland Berger 2018).
But despite these remarkable figures, women entrepreneurs across Africa continue to face systemic barriers, especially when it comes to accessing capital. A 2022 survey of 125 female founders in the Middle East and North Africa (MENA) region found that 65.9% identified raising investment as their greatest challenge (TiE Dubai and Wanda 2022). Globally, the picture is similarly stark: in 2024, women-only founded startups received just 1.5% of venture capital in Europe, and 2.1% in the United States.
Does this mean hope is lost for Africa’s women entrepreneurs? Far from it. In fact, it presents a unique opportunity. Private and public equity, though often underutilized, could hold the key to unlocking the next phase of growth for women-led businesses. In this article, we’ll explore how equity funding can be better leveraged in Africa to empower female entrepreneurs, drawing on global models, regional examples, and bold ideas for financing the future.
The Equity Gap: Why Access to Capital Is Still a Major Hurdle
Despite the rising number of women-owned businesses across Africa, access to capital remains one of the most persistent barriers to growth. While microfinance and small loans have helped women launch enterprises, these tools often fall short when it comes to scaling operations, hiring staff, or expanding into new markets. For many female entrepreneurs, the problem isn’t starting — it’s growing.
Traditional financing mechanisms in Africa tend to rely heavily on collateral-backed debt, which disproportionately excludes women due to systemic barriers, including lower land and asset ownership, informal business registration, and limited credit histories. According to the World Bank, as of 2022, thirty out of the 49 countries that make up Sub-Saharan Africa did not have laws prohibiting gender-related discrimination in accessing credit. Furthermore, venture capital and private equity are less common, and even when available, women struggle to tap into them due to investor bias, limited networks, and lack of visibility.
According to the African Development Bank Group, women entrepreneurs in Africa face a $42 billion financing gap across business value chains. This gap isn’t just a missed opportunity for women — it’s a constraint on the continent’s broader economic growth.
Equity financing offers a different path: one that provides not just capital, but often mentorship, strategic guidance, and long-term partnership. Yet many women-led businesses remain unaware of or unprepared for this kind of investment. Bridging that gap — between capital and capability — is the first step toward building a more inclusive and dynamic entrepreneurial ecosystem.
Private Equity: Unlocking Growth Capital
Private equity (PE) and venture capital (VC) are vital funding channels for scaling businesses. Unlike loans, these forms of investment allow entrepreneurs to access substantial capital in exchange for a stake in their company, fueling innovation, job creation, and long-term competitiveness.
Yet in Africa, only a handful of PE and VC firms explicitly target women-led businesses. Alitheia IDF is a notable $100 million gender lens fund investing in gender-diverse businesses across six African countries, including Lesotho, South Africa, Nigeria, Ghana, and Zambia. Alitheia uses a strategy called gender lens investing, which “considers gender-based factors across the investment process to advance gender equality and better inform investment decision-making.” Alithea IDF uses this approach not just in its evaluation of leadership but also to evaluate whether women are represented and strategically engaged throughout the value chain, including employees, suppliers, customers, and board members.
Aruwa Capital Management, a Nigeria-based gender-lens investment firm, also demonstrates that inclusive capital can also be smart capital. Aruwa, for instance, not only prioritizes female-led ventures but also maintains a majority female investment team, creating a fund structure that reflects its mission. Aruwa, too, notes gender-informed investment criteria. For example, the candidate businesses must provide essential goods and services for women, is founded or co-founded by a woman, includes women in its workforce or leadership, supports diversity, has an annual turnover of at least $500k, and boasts a proven management team with a track record of successfully executing its business plan.
Though gender-lens investing is gaining traction, it remains the exception rather than the norm. Barriers persist on both sides: women entrepreneurs often lack the financial literacy or support to navigate PE negotiations, while investors may hold unconscious biases or view women-led startups as riskier.
For PE and VC to become true enablers of women’s business success, funds must design inclusive investment pipelines, offer pre-investment readiness programs, and work with accelerators to identify high-potential women founders. More importantly, success stories need amplification to show investors what’s possible when capital meets inclusive ambition.
Public Equity: A Longer-Term Opportunity
Public equity, defined as raising capital through stock exchanges, represents a more advanced but often overlooked opportunity for women-led businesses. Across Africa, public markets remain relatively shallow, but they are expanding. Platforms like the Nairobi Securities Exchange’s Growth Enterprise Market Segment (GEMS) and South Africa’s A2X aim to make listing more accessible for smaller and mid-sized businesses.
Yet very few women-led companies make it to the IPO stage. The challenges are multifaceted: listing costs, lack of technical support, and low awareness of public market pathways all play a role. Furthermore, cultural expectations and risk aversion may deter some women entrepreneurs from pursuing this route.
Still, the potential is real. Public equity can bring not only capital but also credibility, visibility, and improvements in corporate governance—benefits that can be transformative for businesses seeking to scale regionally or internationally.
Governments and exchanges can help bridge the gap by offering incentives for women-led firms to list, providing support for IPO readiness, and collaborating with accelerators to identify potential pipeline companies. While public equity may not be the first stop on a woman entrepreneur’s funding journey, it should be firmly on the map.
Global Inspiration: Lessons from Southeast Asia
Globally, there are promising models that Africa can learn from. In Southeast Asia, gender-smart investing has been supported by blended finance structures, which combine concessional capital from donors or development finance institutions with private investment. Initiatives like the Women’s Livelihood Bond Series, spearheaded by Singapore-based Impact Investment Exchange (IIX), have mobilized over $228 million in capital for women-focused enterprises across the region.
These bonds combine risk-sharing mechanisms with impact mandates, creating financial products that appeal to both impact-oriented investors and those seeking commercial returns. Similar tools can be adapted for African markets, particularly in agriculture, healthcare, and education, where many women-led enterprises are located.
This model shows that when financial innovation meets gender inclusion, the results can have a significant impact, scaling far beyond the individual enterprise and creating ripple effects across sectors and economies.
The Way Forward: Financing Models and Policy Levers
To realize the full potential of Africa’s women entrepreneurs, a multi-stakeholder approach is needed. Here’s how key players can step up:
- Governments and policymakers can create tax incentives for equity investments in women-led businesses, mandate gender-disaggregated reporting, and support IPO-readiness programs through public-private partnerships.
- Development Finance Institutions (DFIs) can anchor gender-lens funds and de-risk private investments through guarantees, first-loss capital, or blended finance models.
- Investors and fund managers should adopt inclusive sourcing strategies, track gender metrics, and diversify their teams to reduce bias.
- Accelerators, incubators, and networks must play a larger role in preparing women entrepreneurs to access and manage equity, including legal, financial, and operational advisory support.
- Donors and philanthropic organizations can fund ecosystem-building efforts and invest in infrastructure that lowers the barriers to capital.
Crucially, capital alone isn’t enough—it must be paired with capacity, community, and confidence. Equity funding works best when women are seen not just as recipients, but as partners in growth.
Capital with a Gender Lens is Capital for Growth
Africa’s female entrepreneurs are already driving economic growth, addressing local challenges, and creating jobs. What they need now is the capital—and the confidence of capital markets—to go further. Private and public equity are not silver bullets, but they represent a critical part of the financing puzzle.
Investing in women is not just good ethics—it’s smart economics. For investors, it’s time to expand the lens. For policymakers, it’s time to build the scaffolding. For entrepreneurs, it’s time to think bigger.
The future is not just female. It’s funded.
