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There is a critical need for increased levels of entrepreneurship and small business in South Africa – particularly from women. In order to grow the economy, South Africa needs jobs to be created. Research has shown women-owned businesses tend to be more profitable than those run by men. Additionally, recent research predicts that women-owned businesses may 972 000 jobs by 2022. This has led to a call for increased and focused support for women to start their own businesses.
Women in business
Previously, government research has revealed about 45% of women own and actively manage a business. That figure, however, is skewed toward the informal sector where 52% of business owners were found to be female-owned compared to 31% in the formal sector. Recent research by Development Economics and published in 2018, estimated that women-owned businesses established from now to 2022 may generate R175 billion a year while creating 972 000 jobs.
Women-owned businesses are exceedingly profitable
A 2014 SME Survey revealed statistics which showed a small business owned by a woman has more chance of being profitable than those run by men. “While this result may seem like a big win for women, it comes with an immediate qualifier: the level of female ownership is exceptionally low,” says Arthur Goldstuck, SME Survey principal researcher and MD of World Wide Worx.
According to the survey, 78% of women-owned businesses are profitable, compared to 70% for men. “There is a massive gender imbalance in entrepreneurship,” says Goldstuck. “This tells us that women are not given enough encouragement or support to become entrepreneurs. We’ve seen in the past that best training for entrepreneurship and business ownership is on the job experience. There is a further implication, therefore, that not enough women get opportunities in the workplace to start with.”
Women-owned businesses should be encouraged
It is often acknowledged government must do more to increase the number of female entrepreneurs. “Entrepreneurship lies at the heart of job creation, black economic empowerment and bringing the ‘second’ economy into the mainstream economy. Studies show that by international and African standards, South Africa can do much more to achieve its full SME potential – and women entrepreneurs lie at the heart of this,” says a Department of Trade and Industry report on women entrepreneurs.
The Small Enterprise Development Agency says women should be assisted to start businesses. “Lack of information or access to information has been frequently identified as one of the inhibitors of entrepreneurial activity in South Africa," says Goldstuck. “Government and its agencies had introduced some interventions to promote women enterprise development but many women are either not aware of what is available, and/ or once they know what is available, the process for accessing such support.”
With many private lenders and government programmes focused on financing, supporting, and promoting women-owned businesses, it is now more important than ever for women to explore entrepreneurship.
The content in this article was provided by WesBank – a leading Vehicle and Asset Finance provider and part of one of the largest financial services groups in Africa. WesBank is a division of FirstRand Bank Limited.
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