So, investing in African women is potentially very profitable?
Yes – and today I will explain some widely overlooked business perspectives in this regard.
Let’s see what you can take away in this regard for your very own Africa business venture.
When we talk about investing in African
women the issue of equality and social inclusion often takes centre
stage. The problem with this approach is however that African government
and other economic stakeholders at large are less concerned with such
social variables – they are more interested in balance sheets.
This is why the issue of women economic
empowerment in Africa has been largely left to charities and development
institutions. In my view, women have lost out for far too long as a
result of that.
Now, with the new Africa rising narrative at the forefront, the economic potential of women is much more visibly discussed and recognized.
Did you know that – according to the
African Development Bank (2014) – on average, women-owned African
enterprises make up as little as 10% of all business?
Although the participation in power
houses Kenya, South, Africa, and Nigeria are much higher – in Nigeria
for example, around 50% of all start-ups are now run by women – the
bottom line is this: Not involving women in Africa’s journey towards
economic growth does not only mean leaving half of Africa behind, it
also means that Africa’s march towards prosperity will be slowed down
considerably. Simple.
My post today is about the potential, effectiveness, productivity, and profitability of African women.
If you are doing business in Africa I want you to understand two things:
1) African women can become your specific target market – a market that is widely overlooked yet very profitable.
2) African women can become strategic partners in your venture and deliver! This is good for you, the community, and Africa!
Let’s have a look at some
compelling statistical facts and business scenarios you can build around
women, without the notation of merely ‘helping the underprivileged’.
On Finance: Women are the better borrowers – target them !
Financial inclusion is key, but from a
business perspective targeting women is also profitable: Small-scale
farmers and especially women need to have equal access to financial
services – demand is high and supply low. This means that financial
service ventures, for example in form of community banks or micro-credit
banks, can be very profitable in the medium to long-term if implemented
with the right structure and in a favourable environment.
And there is one crucial factor you
should be aware of when you are seeking to increase your success
potential with such a venture: According to panel experts at the World
Economic Forum on Africa agricultural sector rural women are better
managers of their resources. Payback of loans stands at about 96% for
women, but only around 60-70% for men. Here you go, you will not only be
able to make profits with your financial services targeting women, but
also minimize management cost and risk. Do you have $50,000 to invest –
get started! Targeting already successful women traders outside of the
big cities or women who manage high-value crops may be your best bet.
Agricultural Cooperatives: Step into the effectiveness of rural women
According to experts at the World
Economic Forum on Africa, women are responsible for 80% of farming
activity, yet they own only 2% of the land! And they receive far fewer
resources. The figures released by the African Development Bank look a
little less dramatic: women make up 40% of labour force and 2-20% own
land.
This is obviously a Pan-African
statistic, and it can vary, but the figure really hits home. It should
hurt all of us as Africans. You truly have to confess that what we call
‘culture’ or ‘tradition’ would be called something completely different
if we scrutinized it for what it is.
According to the African Development
Bank, just by empowering women farmers with the same access to land, new
technologies and capital as men, we can increase crop yields by as much
as 30% and feed an additional 150 million people!
When it comes to agricultural
productivity women know their stuff, they are hard and honest workers,
and know how to re-invest their money smartly. If you are looking
into investing in agricultural ventures, one smart way is to build local
women cooperatives for products that are highly attractive for export:
Coffee, cocoa, flowers, fruits, spices to name a few. Build women
cooperatives around them and include some on-farm processing where
possible, so you have direct access to bulk and you can help overlooking
production, management, and standards.
In Retail: Women are still a widely overlooked target market!
Africa’s rapid rising middle class and
consumer trends have turned fast-moving consumer goods (FMCGs) into one
of the fastest growing and most lucrative sectors on the continent.
Still widely overlooked however are women as a unique target market for
products around beauty, hygiene, & cosmetics, fashion, accessories,
health, and products related to pregnancy, baby, and children. Several
women entrepreneurs (and even some men) who have been featured in the
media over the last few years have amazing success stories to tell by
tapping into women focused niches – and in many cases they were able to
build hugely profitable businesses for themselves by producing
high-quality affordable brands from scratch that competed well with
expensive imported products.
In ICT – African Women are tech savvy
It may come as a surprise to many that
the new generation of African women in urban areas are actively leading
ahead in Africa’s ICT and tech scene: from apps, to major software
development, to tech based payment systems. Women involvement requires
of course the accessibility of tech for more women, and if you are
interested in investing in women-lead ICT start-ups or tech companies
the various tech hubs across several capital cities are a good starting
point.
If you want to take that a step further, you could invest in a women run technology company that also focuses on women as a target market
– because there is in my eye still a lot of potential. Interestingly,
two of the better known apps that target pregnant women and new mothers,
GiftedMom from Cameroon and MAMA, were invented by
two young African men. It may frankly not be the most profitable social
enterprise venture, but when we see ICT savvy, young men applying their
knowledge to decrease death after birth for mother and child – I call it
‘ New Hope for Africa’ – and that is priceless!
And there is more – it’s smart!
The issue of women inclusion and
economic empowerment receives now more attention in both the public and
the private sector. So much so, that you can receive access to
additional funding sources, spark more media interest, and get the
attention of high-profile policy makers (genuine or not) when you
promote your business as one that is successfully run by African women,
when it employs only women, or empowers explicitly women. So think about
it: putting women at the heart of your venture can potentially also be a
powerful growth and promotional strategy for your business. You will be
quickly seen as a leader or a role model.
As you can see, investing in women is
profitable and significantly contributes to Africa’s development. But
there is one very interesting conclusion delivered by Ernst & Young,
which is perfectly in line with what I discussed so far. I had to share
this with you…..
……Pay attention:
When you look at annual, global,
consumer spending, women control USD 20 trillion. And this is expect to
rise to USD 28 trillion in the next five years. Looking at annual global
earnings, women earn USD 30 trillion. This is expected to rise to USD
80 trillion in five years. A study from Ernst & Young showed that
when we think of the third emerging global market, that will be the women’s market.
Over the next decade, the impact of women on the global economy – as
producers, entrepreneurs, employees and consumers – will be as
significant as that of China’s and India’s respective one-billion-plus
populations.
Here you go: We speak of Africa as the
last emerging market frontier. Yet there is one more to come that will
be as pleasant to witness: The rise of the women.
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