The GEM SA Special Report: Women’s Entrepreneurship in South Africa Report (2024) reveals a concerning trend: the rate of women entrepreneurs exiting their businesses is higher than those starting and running businesses. The key driver of this attrition is access to finance – 21,5 percent of women entrepreneurs cite difficulty securing funding as the primary reason for business failure, compared to 17,2 percent of their male counterparts. This widening gender gap, particularly as businesses mature, points to an urgent need for targeted support to help South African women-owned SMEs to scale up and achieve sustained success.
To address this challenge, Business Partners Limited has today launched a R90 million Basadi-Women Growth Fund. The Fund provides tailored business finance ranging from R250 000 to R5 million, specifically designed to support women with viable formal small and medium businesses, who may not qualify for finance through traditional channels.
René Botha, regional investment manager at Business Partners Limited, says South African women experiencehigher rates of unemployment and lower education levels than their male counterparts. “This inequality is mirrored in entrepreneurial activity where the percentage of men who own established businesses in the country – 7,9 percent – is nearly double that of women at 4,1 percent according to the Women Entrepreneurship in SA Report.”
Implications of limited access
The Women Entrepreneurship in SA Report further highlights that the leading reason entrepreneurs exit their businesses is lack of profitability – impacting both men and women, though more severely for women (34,4 percent for women vs 21,5 percent for men). Beyond this shared challenge, gender-specific barriers become evident. For women, family and personal responsibility matters (21,5 percent for women vs 12,1 percent for men) and difficulties accessing finance rank as the next most significant factors.
While men also face funding challenges, this ranks third for them – behind their next primary reason, which is the desire to sell their business when a favourable opportunity arises or to pursue new ventures (18,7 percent for men vs 10,8 percent for women). Strikingly, exiting a business due to retirement is almost non-existent among women entrepreneurs (0,0 percent for women vs 10,3 percent for men), underscoring the systemic sustainability issues that continues to shape female entrepreneurial journey.
Botha notes that limited access to funding doesn’t just hinder the survival of women-owned businesses – it also stifles their growth. As a result, women-led businesses scale at a significantly slower pace than their male counterparts. Only 4,9 percent of women’s business ventures reach a headcount of 20 or more employees versus 11,8 percent for men.
“We need to cultivate an inclusive entrepreneurial environment for women to experience the same level of growth and opportunity as men. We plan to do this by providing not only funding, but access to networks where entrepreneurs can be exposed to mentorship opportunities,” says Botha.
Wider benefits of funding women
Women not only experience unequal access to financial support but also persisting gender stereotypes. “Many women still shoulder the greater burden of home and family care, and this demand often conflicts with the demands of running a business and may influence how their finance applications are reviewed,” says Botha. She adds that to truly level the playing field, we require financing that applies a gender lens to investment decisions – recognising these unique challenges and opportunities.
“The Basadi-Women Growth Fund has been established to bridge this gap and contribute to driving more participation by women in entrepreneurship,” says Botha.
Increased participation from women in entrepreneurship has the potential to contribute significantly to sustainable economic growth. “On top of the benefits of job and wealth creation, women mainly enter entrepreneurship to make a positive difference in society. This benefit alone should outweigh any barrier to entry they face if we want to drive economic growth and impact society in South Africa,” adds Botha.
How the Business Partners Limited Basadi-Women Growth Fund works
The Basadi-Women Growth Fund provides business finance that can be used for property acquisition, working capital, equipment or asset finance, acquisitions or takeovers, as replacement finance or to buy a viable start-up franchise. The financing is competitively priced with terms structured to ensure sustainability and growth potential. A true gamechanger for the Fund is its flexible structure: women-owned businesses benefit from the option of an interest capitalisation or a repayment moratorium of up to six months.
To qualify, the borrower will need to be a private company or close corporation that is at least 50 percent women-owned and operated with an annual turnover below R20 million.
“Through the Basadi-Women Growth Fund, we aim to do more than provide capital. By offering technical support as well as networking and mentorship opportunities, we’re addressing the deeper barriers that limit women entrepreneurs’ growth. We do this because we understand that women’s success is not only their own – it drives communities forward,” concludes Botha.
Finance applications can be submitted online, where potential applicants will find a list of criteria and required documents. Women entrepreneurs who are ready to grow their businesses can apply, here [https://www.businesspartners.co.za/basadi-women-growth/].