Despite the gender gap and the impact of the Covid-19 pandemic, women in South Africa are making progress as entrepreneurs, indicating a strong will and determination to survive, according to transaction services multinational Mastercard's Index of Women Entrepreneurs (MIWE).
South Africa is one of only 12 economies where women’s entrepreneurial activity rates increased, with 11.1% of working-age women engaged in early-stage entrepreneurial activities.
The MIWE highlights the vast socioeconomic contributions of women entrepreneurs across the world, provides insight on the factors driving and inhibiting their advancement and makes a compelling case for building on targeted gender-specific policy best practices internationally.
However, while South Africa moved up one place from 2020 to rank thirty-seventh in 2021, with a score of 54.9, women’s advancement still remains hampered by less supportive entrepreneurial conditions compared with other global economies such as the US, which ranked first, with a score of 69.9; New Zealand, ranked second, with a score of 69.8; and Canada in third, with a score of 68.6.
Despite this, South Africa moved up two places on the Women Business Owner benchmark to rank forty-fourth, with 21.9% of all businesses owned by women in 2021 versus 21.1% in 2020. Botswana (38.5%) ranks first in the world with the highest percentage of women business owners, followed by Uganda (38.4%) and Ghana (37.2%), Mastercard says.
“The 2021 MIWE reflects the challenges of a persistently uncertain global entrepreneurial landscape, as well as a marked rise in both female and male necessity-driven entrepreneurship as many had lost their jobs arising from lockdown and restriction measures,” says Mastercard Southern Africa country manager Gabriel Swanepoel.
“The fact that women entrepreneurial activity rates in South Africa grew in a year when many other economies did not, together with the fact that female necessity-driven entrepreneurship surpassed that of males, indicates their strong will, resilience and determination to survive.”
South Africa performed relatively well in the Women’s Advancement Outcome component, ranking twenty-first, which measures women’s progress and degree of marginalisation as business leaders, professionals, entrepreneurs, and labour force participants.
Further, although the Women’s Entrepreneurial Activity Rate component declined in most economies during the pandemic, South Africa is one of only 12 economies where women’s entrepreneurial activity rates increased, with 11.1% of working-age women engaged in early-stage entrepreneurial activities, up from 10.2% in 2020, compared with 11.7% for men, up from 11.4% in 2020.
This growth in female entrepreneurism is likely spurred by various factors, including a significant increase in female necessity-driven entrepreneurship, up to 91.2% in 2021 from 62.8% in 2020; perceived opportunities to start a business, up to 60.4% in 2021 from 51.8% in 2020; self-perceived business capabilities, up to 60.4% in 2021 from 50.2% in 2020; as well as improvements in internal market openness to 45.2% in 2021 from 41.7% in 2020; higher education entrepreneurial training to 50.6% in 2021 from 47.4% in 2020, and availability of small and medium-sized enterprise (SME) venture capital to 43.6% in 2021 from 42.6% in 2020.
Further, South Africa ranked fifty-fifth in the Knowledge Assets and Financial Access component of the MIWE, which is an area where South Africa has room for improvement. Women are constrained by poor access to finance, down four places to rank fortieth, and government SME support, which was stable at rank fifty-four.
Additionally, while the female tertiary education enrolment rate in South Africa is higher than men, with 26.5% females enrolled versus 18.5% of men, it remains quite low on a global scale, albeit stable at rank fifty-seven. From a financial inclusion perspective, South Africa dropped five places to rank thirty-sixth on the index, possibly exacerbating the impact of the pandemic on women, Mastercard adds.
Meanwhile, South Africa ranks thirty-seventh in the Supporting Entrepreneurial Conditions component of the Index, which benchmarks how supportive entrepreneurial conditions are as enablers or constraints of women business ownership.
While South Africa dropped two places for its entrepreneurial framework indicator to rank fifty-four, which includes access to infrastructure, perceived extent of intellectual and property rights and ease of access to skilled employees, its 2021 score was boosted by a positive change in cultural perceptions of women entrepreneurs, up nine places to rank thirty-seven, and competitiveness, up three places to rank twenty-fifth.
“While women entrepreneurs are playing an increasingly larger role in the South African economy, there is need to address the structural challenges of social and gender equalities that still hinder their progress. Continuing to create the right social, political, and financial understanding and conditions for women to thrive is of tremendous importance for future economic growth,” says Swanepoel.
As part of Mastercard’s commitment to creating a world where women entrepreneurs are equally represented and supported, the company made a global commitment to connect 25-million women entrepreneurs to the digital economy by 2025. Mastercard’s philosophy is that not only will empowering women’s entrepreneurship act as a catalyst for growth and innovation, but it will raise up the communities around successful women and fuel a global recovery that is more equitable and sustainable for everyone, he says.