Financial services provider for small and medium-sized enterprises (SMEs) Business Partners has launched a R90-million Basadi-Women Growth Fund.

The company points out that research has shown that the rate of women entrepreneurs exiting their businesses is higher than those starting and running businesses. The key driver of this attrition is a lack of access to finance.

The new fund provides tailored business finance ranging from R250 000 to R5-million, specifically designed to support women with viable formal small and medium-sized businesses, who may not qualify for finance through traditional channels.

Business Partners regional investment manager René Botha says South African women experience higher 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% – is nearly double that of women at 4.1% according to the Women Entrepreneurship in South Africa Report.”

The 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% for women and 21.5% for men.

Beyond this shared challenge, Business Partners notes that gender-specific barriers become evident.

For women, family and personal responsibility matters – 21.5% for women compared to12.1% 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% for men vs 10.8% for women).

Strikingly, Business Partners points out that exiting a business owing to retirement is almost non-existent among women entrepreneurs – 0.0% for women compared to 10.3% for men – underscoring the systemic sustainability issues that continues to shape female entrepreneurial journey.

Botha notes that limited access to funding does not just hinder the survival of women-owned businesses, but also stifles their growth.

As a result, Business Partners posits that women-led businesses scale at a significantly slower pace than their male counterparts, whereby only 4.9% of women’s business ventures reach a headcount of 20 or more employees compared to 11.8% 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

Business Partners argues that 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, financing that applies a gender lens to investment decisions is required, 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.

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.

Business Partners says the financing is competitively priced with terms structured to ensure sustainability and growth potential.

It notes that a “gamechanger” of the fund is its flexible structure, with women-owned businesses benefiting 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% women-owned and operated with a yearly 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.