Systemic gaps are stifling the growth of women-led Small, Medium and Micro Enterprises (SMMEs) in South Africa, and the support structures look good on paper but fall short on application due to limited access to funding, women entrepreneurs say.

Matsie Mpshe, founder of the SMME Empowerment Summit, a transformative platform dedicated to the development and success of small businesses in South Africa, stated that most funding institutions still require collateral, and many women entrepreneurs struggle to access funding due to a lack of property or assets.  

“This is particularly a challenge in the townships and rural areas where owning property is challenging. Gender-based bias in funding decisions can result in limited funding being made available to women when loans and investment decisions are being made. Once-off grants without follow-up support in the form of mentoring and coaching often fail to create long-term sustainable growth,” Mpshe said. 

She added that while the country has great B-BBEE and gender-sensitive policies, gaps are found in enforcement on the ground. 

“Available support is often generic and not gender-specific. Funding programmes do not take into consideration women’s specific challenges, such as the fact that women generally act as primary caregivers to children, which often results in limited travel and networking opportunities. 

“There are safety concerns when women are running operations after hours in unsafe areas; training programmes are often designed without taking into consideration women-dominated industries such as services, retail, catering, etc. Limited Mentorship Networks in that networking spaces are often male-dominated, making it harder for women entrepreneurs to access informal business opportunities,” Mpshe highlighted.

She said lucrative contracts are often awarded to large companies that are only nominally owned by women. 

“There needs to be targets with KPIs specifically tracking procurement opportunities awarded to women-owned entrepreneurs with time-bound deliverables, monitoring and tracking of progress, as well as specific implementable actions to ensure getting back on track in the event of any deviations from the targets. These efforts should be continuous throughout the year, not just during Women’s Month in August,” Mpshe said.

There needs to be a move from quotas to embedded participation. Women are often included in procurement or ownership structures purely to meet targets, without real decision-making power or operational involvement.

Policies must enforce beneficial ownership verification that ensures that women shareholders actually also actively control and manage the businesses. Procurement B-BBEE points should be linked to the long-term performance of the contracts and not just to the initial awarding, she said.

She added that the biggest misconception about women-led SMMEs is that they do not require gender-responsive support. Far too many programs still treat all entrepreneurs uniformly without addressing women-specific barriers.

Mpshe noted that there is an overemphasis on start-ups and not enough on scale-ups. 

“Far too many programmes focus on encouraging women to start businesses rather than helping them to grow from micro-entrepreneurs to large businesses. There needs to be more scaling support, such as advanced financing, getting women-led businesses to be export-ready, digitalisation of operations, etc.,” she said. 

Mandisa Nkwanyana, president of the Business Women’s Association of South Africa (BWASA), said the barriers facing women-led SMMEs extend far beyond seasonal visibility.

“Our Women in Leadership Census, a rigorous, decade-long study, reveals that, First, access to capital remains catastrophically skewed, as women receive less than 10% of venture funding, and rural entrepreneurs face predatory collateral demands due to unresolved land tenure policies. Second, digital exclusion cripples scalability, with 32% of women-led rural SMMEs lacking broadband access, locking them out of e-commerce and modern supply chains. 

“Third, the leadership pipeline is fractured and only 17.3% of CEO roles are held by women, starving SMMEs of mentorship and procurement advocacy. Finally, unpaid care labour, where women spend triple the hours on domestic work compared to men, steals time from business growth. These aren’t abstract challenges; they are daily realities our members articulate in township workshops, boardrooms, and policy dialogues. Until we dismantle these structural inequities, symbolic Women’s Month panels will remain just that — symbols without substance,” Nkwanyana said.

She added that these insights ignite BWA’s targeted interventions in which digital equity becomes non-negotiable, potentially championing redirection of 25% of National Skills Fund resources to rural broadband infrastructure. This, she said, responds directly to census findings that 32% of women-led rural SMMEs remain digitally excluded.

“Simultaneously, we advance corporate accountability by lobbying for public scorecards requiring JSE-listed firms to disclose spending with women-owned suppliers — confronting the crisis of only 17.3% women CEOs starving SMMEs of procurement advocacy. These priorities are springboards for broader coalitions to embed enforcement mechanisms in policy frameworks. Where data exposes fractures, we deploy strategy — turning evidence into scalable action for women-led economic justice.”

The realities of a woman running a tech start-up in Sandton versus a smallholder farmer in Vhembe are worlds apart, Nkwanyana said. 

“BWA’s vision is uncompromising in that it aims to transform corporate South Africa’s symbolic gestures into verifiable, year-round inclusion of women-owned businesses. To achieve this, we mobilise three pillars of action. First, embedding mandatory supplier diversity into executive KPIs by tying 30% of procurement budgets and leadership bonuses to audited spending with women-led SMMEs. 

“Second, redirecting Enterprise Development funds from soft-skills programmes and Women’s Month sponsorships into sustained incubators like our Thrive Programme, spearheaded with corporates to build bankable women suppliers. Third, through collaborations with partners like Vula, deploying AI-driven matchmaking to connect corporates with vetted women-led ventures in strategic sectors such as mining, green energy, and tech, because intentional pairing beats passive pledges,” she stated.

According to the Global Entrepreneurship Monitor (GEM) South Africa Report 2023/2024 by Stellenbosch Business School, on Women Entrepreneurship in South Africa, women are exiting their businesses at a higher rate than they are starting and running businesses.

The report states that this is an indication that South African women entrepreneurs need more support in growing start-ups to the established stage of more than 3,5 years.

Natanya Meyer, lead-author of the report and associate professor in the Department of Business Management and SARChI for Entrepreneurship Education at the University of Johannesburg, said the lack of business support tailored to women’s specific challenges and needs, puts South Africa’s women entrepreneurs on the back foot in realising their potential to make a greater contribution to economic growth and job creation.

The GEM SA research co-authored by Stellenbosch Business School research fellows Mahsa Samsami and Angus Bowmaker-Falconer found a notable gender gap in business growth, with 11.8% of men’s business ventures reaching the threshold of employing 20 or more people, while only 4.9% of women-owned businesses had done so. Women were more likely to be “solo-preneurs”, at 4.9% compared to 1% of men.

Meyer said: “The data highlight gender disparities in business scaling, with men owning larger businesses at a disproportionately higher rate than women. This could reflect various obstacles women might encounter in business expansion, including limited access to funding, networks, mentorship support, and resources.”

The top reason for exiting businesses was lack of profitability for both women (34.4%) and men (21.5%), while their other leading reasons differed thereafter.

Women’s next two main reasons were personal and family matters at 21.5%, almost double that of men at 12.1% and problems obtaining finance were 21.5% vs men 17.8%. After a lack of profitability, men mostly exited their businesses due to an opportunity to sell at 18.7%, vs 10.8% of women.

The report recommended improved implementation and awareness of policies, noting that South Africa has a progressive set of policies to promote gender equality, but lacks in effective implementation. 

“Government policies promoting women entrepreneurship should prioritise a gender-neutral legal framework, reduce bureaucratic obstacles, and increase access to finance for women entrepreneurs. 

“Financial literacy and business management skills training should be enhanced for young women, especially in rural areas. Family-friendly policies should be promoted, and developing specific laws for women-owned small enterprises could significantly impact their success,” the report states.

It noted that sustainability initiatives can be costly for small businesses, especially in highly-regulated industries, and that impact investing and government incentives can support sustainability practices, as research has shown that women entrepreneurs prioritise social, health, educational, and environmental impacts over profit.

gcwalisile.khanyile@inl.co.za

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