Women-Led SMEs are Shaping a Resilient Future

By Rita Odero , Director, of Business Development Services (BDS), MEDA (Mennonite Economic Development Associates) Economic Development Association

The Africa Women Innovation & Entrepreneurship Forum (AWIEF) Conference & Awards, a premier platform for African women in business, celebrates and supports innovation, entrepreneurship, and economic empowerment.

This annual gathering, now in its 10th edition, will be held in Cape Town on November 28-29 and brings together entrepreneurs, investors, policymakers, and stakeholders committed to advancing gender equity and building resilient ecosystems for women entrepreneurs. It provides an invaluable space for African women entrepreneurs to share insights, network, and highlight the critical importance of gender diversity, equity, and inclusion in driving sustainable economic growth across the continent.

Women-led small and medium-sized enterprises (SMEs) play a vital role in Africa’s economy, contributing to job creation, economic diversity, and local development. Yet, the journey for many of these women entrepreneurs is far from easy. The ecosystem is often marred by challenges such as limited access to capital, visibility, market entry barriers, and regulatory complexities.

Despite these hurdles, African women entrepreneurs continue to demonstrate resilience and innovation, proving themselves vital contributors to Africa’s growth and development. Funding models that address these unique opportunities are crucial, especially those that integrate gender lens investing—a model that prioritizes investments in businesses led by or benefiting women and considers the broader impacts of those investments on gender equity.

The Mastercard Foundation Africa Growth Fund, a consortium of partners led by the Mennonite Economic Development Associates (MEDA), exemplifies a model tailored for gender-diverse investing with an emphasis on empowering women and youth. The Fund’s approach prioritizes not only the financial viability of women-led businesses but also their capacity to create meaningful and sustained economic impact within their communities. For example, within the food-processing sector, some women-led enterprises source locally from smallholder farmers, creating a ripple effect that strengthens local economies and provides sustainable incomes for women and youth.

At the heart of this funding model are initiatives that support SME growth across the investment cycle, starting with pre-investment assessments. The fund engages directly with SMEs to discuss strategies, operations, and opportunities. An assessment tool is used to identify areas for improvement in governance, management structure, product/service offerings, sales, and operations. The fund supports SMEs in talent recruitment, particularly in accounting and financial management to streamline business operations and improve financial decision-making.

Through this process, businesses are better prepared for the investment journey and are positioned to identify areas for improvement early on. This includes assisting SMEs in recruiting key personnel, particularly in roles like financial management and accounting, which are fundamental for sound decision-making and efficient operations.

An example of successful reinvestment intervention is seen in a portfolio company that, with support, recruited a key financial management resource to streamline its business operations, identify crucial revenue drivers, and establish clear financial benchmarks. Another significant intervention included hiring human resources personnel to enhance staff retention and improve overall team management, ultimately fostering a more sustainable and cohesive work environment.

Once an investment has been made, post-investment support becomes essential in ensuring these businesses can scale sustainably. The Funds’ approach in the post-investment stages is tailored to the unique needs and growth strategies of each SME. For instance, implementing systems such as sales automation tools has helped some SMEs transform their customer experience, streamline sales processes, and enhance data accuracy for informed decision-making. Enhanced customer service and refined sales processes not only improve brand loyalty but also set these businesses up for long-term success, particularly in competitive markets.

Beyond operational and technical support, The Fund’s involvement extends to fostering a gender-inclusive culture that recognizes the potential of women-led businesses as agents of economic change. The fund incorporates gender diversity, equity, and inclusion, as well as environmental, social, and governance (ESG) initiatives. Capital barriers are often lowered for first-time and emerging investment leaders, reflecting a commitment to breaking down entry barriers for women entrepreneurs.

However, supporting SMEs in Africa requires more than capital and operational guidance; it calls for a network of partnerships that promote a favorable environment for women entrepreneurs. The Fund prioritizes ecosystem engagement, fostering relationships that bolster female-led businesses through regulatory advocacy, pipeline development, and community support. Recognizing the importance of a collaborative approach, the fund aims to create a diverse database of investment-ready companies, supporting women-led businesses as they navigate complex market landscapes and work to achieve sustainable growth.

One significant factor in supporting the growth and recognition of women-led SMEs is the role of awards and accolades. Recognition can be instrumental for SMEs, providing them with visibility, credibility, and often a launch pad into new markets or product lines. Awards signal to the broader market that these businesses have a proven track record, making them more attractive to potential investors and partners.

Looking to the future, the Fund is committed to expanding gender-lens investing principles within the SME landscape, working to shift practices across the investment ecosystem toward greater inclusivity and equity. This momentum must continue. Investors, policymakers, and the business community are urged to take up the call to support women-led SMEs, not only as a matter of economic empowerment but as a core strategy for sustainable development. By actively fostering opportunities for women and youth, the continent can cultivate a thriving SME sector that drives inclusive growth and shared prosperity for future generations.