Women-led businesses are more vulnerable to closure than those led by men in the era of the novel coronavirus, due to women’s limited access to finance, shifts in consumer behavior, and the increase in women’s household care responsibilities as a result of extended lockdowns.
All across the continent, the coronavirus pandemic is wreaking economic havoc and hitting women the hardest, with women-led Small and Medium-sized Enterprises(SMEs) at greater risk of closure as they tend to be smaller and on average, operate in lower profit margin, service-based industries.
These and other important findings of a new policy brief highlighting policy solutions to support women-led businesses in Africa in a post COVID-19 world, were released during a webinar organized Wednesday 15 July by the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program, working with UN Women(link is external) and ImpactHER(link is external).
“The compilation and analysis of real time data is crucial as Africa responds to the pandemic. The surveying of women-led businesses from across sectors and industries provides opportunity to have targeted interventions aimed at keeping these vital contributors to African economies afloat,” said Esther Dassanou, AFAWA Coordinator.
The brief, titled ‘Transformative policy solutions to support women-led businesses in Africa in a post Covid-19 world,” contained results of an ImpactHER survey of more than 1,300 women-owned SMEs in 30 African countries on the impact of COVID-19 on their businesses. Over 200 participants joined in the virtual webinar, which was moderated by UN Women’s Elena Ruiz, Women’s Economic Empowerment Regional Policy Advisor for West and Central Africa.
“The policy brief and the discussion have put on the table strategies that work for women entrepreneurs in the region. We hope this will contribute to make sure that women entrepreneurs and women-led businesses are at the centre of COVID19 recovery plans, and to help governments and other actors build a post-COVID economy that challenges, rather than reproduces, gender inequalities,” Ruiz noted.
Panelists in Wednesday’s seminar were Ada Udechukwu, Head of Women’s Banking at Access Bank, Nigeria; Efe Ukala, Founder of ImpactHer; Sylvia Natukunda, Founder & CEO of yogurt company Farm Reap in Uganda; Kosi Yankey, Executive Director of the National Board for Small Scale Industries in Ghana and Dr. Boutheina Ben Yaghlane Ben Slimane, Director General, Caisse of Deposits & Consignments in Tunisia.
They shared perspectives from government, private sector and banking on how women-led businesses in tourism, trade, retail, hospitality, education, personal care and similar sectors have suffered as result of COVID-19, and offered recommendations for immediate, short- and medium-term solutions to mitigate the impact on women-led businesses.
“ImpactHER commissioned the survey to allow it to provide practical solutions to women-led businesses,” Efe Ukala, its founder, said. “So far, ImpactHER has offered resilience training, custom business advisory services including financial forecasting, valuation, company restructuring, rebranding, etc., technology tools such as e-commerce websites which are critical to ensure the viability of women entrepreneurs in a post-COVID era.” ImpactHER has provided such support to over 3,000 women entrepreneurs in over 25 African countries, Ukala noted.
The panelists also showcased solutions in action, such as the African Development Bank’s recent approval of a loan of 264 million euros to help support the Moroccan government to mitigate the health and socio-economic crisis brought on by the pandemic. Parts of these funds will go towards mobilizing financial resources for women-owned enterprises whose cash flow has deteriorated due to declining activity. Through Bank Al-Maghrib, women-owned SMEs will have access to guarantees that cover 95% of the credit amount and enables banks to rapidly put together exceptional overdrafts to finance the target companies’ operating capital needs.
“The fight against the pandemic requires public and private sector involvement to enhance women entrepreneurs’ ability to bounce back from the crisis. Efforts such as the one in Morocco as well as Tunisia and Ghana, should be replicated throughout the continent,” Dassanou said.
The discussions also showed how Coronavirus not only potentially exacerbates already existing inequalities between men and women, but has led to other hurdles for women, including limited access to finance, key networks, information, skills gaps, as well as limited control over assets that they can leverage to obtain financing.
“The AFAWA initiative’s collaboration with UN Women and ImpactHER to provide solutions has great potential to influence policy,” Vanessa Moungar, Bank Director for Gender, Women and Civil Society, noted.
*To access the policy brief, click here.