Africa: Women entrepreneurs cannot access capital…unless other women manage it

by MMC
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Across the world, it’s much harder for women entrepreneurs to get the financing they need to grow their businesses. The gender gap prevents women from reaching their potential and costs sub-Saharan Africa an estimated €1.5 million. 95 billion dollars every year. So how can we solve this problem?

To start, we can put women in the driver’s seat of capital flows.

There are many women fund managers more likely investing in women entrepreneurs, and the founders are more likely to hire women. This is what we do at WIC Capital, a $20 million investment fund launched by the Women’s Investment Club (WIC) Senegal and managed by WIC Gestion. We exclusively target women-led start-ups in West Africa. We know firsthand that women invest in other women and, more broadly, in their communities. Want to get the job done? Invest in a woman.

Realize the power of finance

I started my career in the banking sector in Paris. This is where I discovered the power of finance. It’s key to everything we do, not only as people, but also in our businesses. And that’s when I decided to pursue a career in investing. I knew I wanted to help businesses grow and thrive, not in the United States or Europe, but at home in West Africa.

Senegal, my country of origin, has many women entrepreneurs; 31% of entrepreneurs in Senegal there are women, which is higher than in most other countries in the world. However, the problem is that the majority of women-led businesses operate on a very small scale, generating less than $200,000 in revenue per year. And for this reason, they are not attractive to banks. We found that around 44% of Senegalese women entrepreneurs who borrow money do so from their loved ones, and that only 3.5% of them use financial institutions to access credit. It holds them back.

Women-led SMEs are not getting the financing they need to invest in their own growth. And on top of the financial challenges they face, women entrepreneurs lack access to the networks or training opportunities that provide them with the knowledge and support needed to grow their businesses.

When I saw this, I wanted to dig in. There was a clear opportunity here that was being overlooked.

Women invest in women

When you talk about the private sector in Africa, you are mainly talking about small and medium enterprises, or SMEs. These companies are the engine of economic growth and their success in the market contributes to improving the living standards and employment of communities, which benefits the continent as a whole. So, in 2017, I became a member of WIC Senegal. I was seduced by their vision of giving women access to modern financial tools for inclusive economic development. This was the perfect opportunity for me to make investments that increased access to capital for SMEs while simultaneously improving the lives of women.

The seeds of what would become WIC Senegal grew up at a luncheon in 2015. It was International Women’s Day, and four women — a group of friends and executives from organizations like Dalberg and Deloitte — discussed the challenges and opportunities facing women entrepreneurs in West Africa. They decided to create a club that would invest in other women in French-speaking West Africa, providing them with the funding they needed to grow their businesses.

The idea gave birth to WIC Senegal, a constantly growing collective of women (96 in Senegal, 25 in Ivory Coast) who pool their resources. WIC Senegal then uses the funding to make investments. The Club also provides business advice, mentoring and networking to women entrepreneurs in Senegal and Ivory Coast.

Today, we are going beyond the collective to attract additional investors from the region and around the world. With the support of YOU SAID , we launched our first investment fund: WIC Capital. It is the first of its kind in the region, a $20 million investment fund focused on the growth of women-led businesses in Senegal and Ivory Coast.

The companies we support must be founded by women, at least 50% owned or led by women, or have a majority female management team. When we choose an investment, we look at its growth potential and impact. We want to enable more women-led businesses and SMEs to go from small to large scale; this is our sweet spot.

The women we invest in

Our first investment was in a recycling factory, E-COVER, run by two 25-year-old women. They were young, but what they lacked in experience they made up for with great motivation and a desire to learn from us, the mentors in the WIC network, and the various programs they were a part of. We also work with women who have had successful careers and are now ready to start their own business. We have a different approach for each entrepreneur and offer tailor-made support to help these businesses thrive. This is part of why entrepreneurs are attracted to us.

We have also invested in a local bakery chain, Mburu, run by a woman who uses mainly locally sourced organic grains. She’s not just growing her business; she also creates positive social impact by working with other women throughout the supply chain – grain producers, bread processors and distributors. The business can generate income and create a nutritious, organic product for the community. These are exactly the type of small businesses we seek to support. This is where growth and job creation happens. When a small business can go from five jobs to 20, 25, then 50, that’s a huge win for us.

Excited for the future

As International Women’s Day approaches again, I’m excited about the year ahead. We will finalize the investments we have been working on in the first months of 2022 and accelerate our investment process through a practical investment readiness program we have designed through the WIC Academy, our center internal technical assistance. .

This year, we have seen our four portfolio companies – E-COVER, Sarayaa, Les Ateliers de Corinne and Mburu – prosper and begin to generate increasing revenues. Mburu launched a second bakery in Dakar and the business tripled its turnover. The owner of the Les Ateliers de Corinne cooking school has opened her first space including a pastry shop, a restaurant and a studio to shoot her culinary videos. E-COVER has started serving both the local cement market and that of neighboring countries, and is about to launch a new fundraising to increase its capacity.

We hope that once investors get a first taste of what women entrepreneurs in Senegal can do, they will come back for more. With the support of YOU SAID , we raise funds from outside institutions, foundations, high net worth individuals and, of course, local capital sources. We hope to attract more risk-averse investors by incorporating a first loss layer into the Fund to protect against losses suffered by portfolio companies.

While it’s easy to look at the gender equity gap in most countries and dismiss it as a problem too big to solve, I think it’s not all bad. In Senegal, our women are free. They have defenders; voice to denounce gender inequalities. There are so many strong women paving the way for younger people, so many role models.

This is why I am delighted to operate in Senegal. The future of our women-led businesses in West Africa is bright.

Evelyne Dioh SIMPA is the general director of Capital WIC, the first investment fund to exclusively target young women-led businesses in West Africa. The fund was created in 2019 by the Women’s Investment Club Senegal, a group of +80 Senegalese businesswomen. Evelyne is an experienced investment professional who joined WIC Capital after working for FONSIS, the sovereign wealth fund of Senegal, where she was responsible for managing +100 million euros of transactions across several sectors, including industrial , energy and agriculture. She previously worked at the General Inspection of the Société Générale group. She holds a master’s degree in management and an M.Sc. in Management Control from EDHEC Business School in France.

Evelyne’s life mission is to contribute to the development of the African private sector, by strengthening and growing small businesses. She is also passionate about gender issues in modern African societies. In 2021, she was classified in Le Choiseul 100 Africaas one of 200 young African leaders aged 40 and under, who will play a major role in the economic development of the continent in the near future.

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