Malehlohonolo Moleko lives in Boipatong, Vanderbijlpark. At 18, she became a mother. She did not have the funds to continue her education after leaving school, so she started a business selling baked goods. She didn’t always have the money to buy flour. After some time, she was accepted into a training workshop for women in business. It meant 15 hours of work and study daily. But she is now able to pay for her son’s education and is mentoring other young women in her community. She is now making triple the money she made before taking those classes. She hopes to buy a house one day. In December 2012, she boarded an aeroplane for the first time, to deliver a TEDx talk in the US. “Everything I did, I did on my own,” she says. “My story is one of hard work and passion … All I needed was a hand up. There are hundreds of millions of women who can achieve what I can achieve.”

Moleko’s story is not unique. There is increasingly a recognition of the role played by female entrepreneurs; 52% of the population is female, and last year, SA Good News reported that there had been an 11% increase in the number of female entrepreneurs. According to the 2014 SME survey, 78% of women-owned small businesses are profitable, compared to 70% for men.

However, this isn’t a complete picture. “While this result may seem like a big win for women, it comes with an immediate qualifier: the level of female ownership is exceptionally low,” Arthur Goldstuck, SME Survey principal researcher and MD of World Wide Worx, said after the release.

“There is a massive gender imbalance in entrepreneurship,” he added. “This tells us that women are not given enough encouragement or support to become entrepreneurs.

“We’ve seen in the past that the best training for entrepreneurship and business ownership is on-the-job experience. There is a further implication, therefore, that not enough women get opportunities in the workplace to start with.”

Speaking at an MCom Development Finance Forum at the University of Cape Town Graduate School of Business on Thursday, Small Business Development Minister Lindiwe Zulu acknowledged that this was a continent-wide problem, and that governments across Africa – South Africa’s included – needed to do more to support female entrepreneurs. “If we look at what happened with SMEs (small and medium enterprises) in other countries, Africa hasn’t started,” she said. “If you look at women in the market, and the infrastructure from which they are operating, it’s criminal.

“If you look at women who have to carry whatever they are buying and move it from one country to the next; the infrastructure and the transport, and the support that they are supposed to be getting from us, it is also miserable.”

When it came to development, there needed to be a greater recognition of the role of both small and informal businesses, Zulu said. “If you are thinking of FDIs (foreign direct investments), please don’t only think of big projects,” she said.

“Think about the things that make life easy for ordinary men and women who are contributing … We have not thought about what they contribute to the growth of their own country.”

The GEM report, released annually, in fact gives a detailed breakdown of the impact of entrepreneurship in several countries including South Africa; it has also informed policy decisions and aspects of the National Development Plan. According to the 2014 issue, informal businesses contribute up to 20% of South Africa’s gross domestic product; GEM argues that understanding them as fully as any other small business is vital.

The same report confirms that while early-stage entrepreneurial activity is mostly down to men, there are no discernible differences in individual attributes such as perceived opportunities and capabilities. There is, however, a higher expression of fear of failure amongst women. And women start businesses more often out of necessity than men.

Zulu’s address was well received by students and delegates, who appeared to welcome her comments.

This is unsurprising. A report by Michael Rogan from May 2014 noted: “Amidst a decline in general poverty rates since 2000, women and people living in female-headed households still are significantly worse off. Women are up to 30% poorer than men on average. There is an even larger poverty gap between female- and male-headed households – a difference of as much as 100%, despite improved education, health and basic services. Better health, water and sanitation services, especially in rural areas, should narrow these gaps significantly.”

This suggests that it is not simply a matter of improving conditions for entrepreneurship, but that bettering the chances of female-owned businesses needs to be an inter-ministerial effort. Zulu acknowledged this. “It’s something that everybody on a day-to-day basis must think about,” she said. “Almost each and every department has got something to offer.”

A Masters of Business Administration study by Sunita Valla on Gauteng businesses, titled Barriers Facing Female Entrepreneurs, notes: “(F)emale entrepreneurs have to contend with socio-cultural, political, structural, economic, legal and personal barriers, compared to men, when they contemplate entrepreneurship. Although some barriers may be the same as those experienced by male entrepreneurs, (…) some barriers were exacerbated for them because of their gender. Thus, even if the Constitution of South Africa states that women and men have equal rights and the same entitlements for engaging in a career in society, reality proves that the experiences of female entrepreneurs in Gauteng are contrary to this (…) Female entrepreneurship in Gauteng serves as a ‘glass ceiling’ for female entrepreneurial ambitions.”

A similar, more recent study by Ayisha Akhalwaya and Werner Havenga adds: “Although women account for more than half the population, they are limited from the formal business environment. Their contribution in business is mainly located in areas of crafts, hawking, personal services and retail sectors. Access to finance; the regulatory environment; developmental opportunities; cultural and societal values; education and training; and family responsibility are the major challenges facing women entrepreneurs.” If women can overcome these challenges, the study notes, the benefits include security and greater freedom, as well as social recognition and, of course, the contribution to the economy in terms of profitability and employment creation.

Columnist and entrepreneur Colette Symanowitz offers an additional perspective on the picture of female entrepreneurship in South Africa. Yes, she acknowledges, it’s true that female-owned businesses are largely profitable and on the rise. But there’s also marginalisation. “Only 38% of South Africa’s established businesses are women-owned,” she writes. “Despite the potential contribution of women to economic development, South African women remain on the outskirts of the economy, dominating the informal economy (…) Male entrepreneurial activity consistently exceeds women’s entrepreneurial activity: men in South Africa are 1.5 to 1.6 times more likely than women to be involved in early stage entrepreneurial ventures.”

Zulu acknowledged some of the broader barriers hindering entrepreneurial activity – those which affect all potential entrepreneurs, but could potentially hit women harder owing to their frequently disadvantaged position.

Alluding to the country’s ailing education system, she said: “One of the issues, again, is education, education, education – if we can just get that right.”

However, she added that once the education system was working, empowerment of women also had to continue beyond formal education. “It is not just in the classroom,” she said. “It also has to happen on a day-to-day basis. I did go to university, but if I don’t go on improving myself, I will get rusty. I was asking some women in KwaZulu-Natal ‘Do you ever read newspapers?’ and they laughed. I told them ‘If you read Business Day or another newspaper covering economics you will begin to understand certain things’. But when they are watching television and it comes to whether the rand is up or down, they are already out of the room. That kind of thing is up to you.”

South Africa has faced its share of controversies regarding labour laws said to restrict job opportunities, as well as zoning and tax laws that complicate the operation of small businesses. The GEM report has also referred to “onerous” laws in South Africa acting as a barrier to entrepreneurship. Zulu did not comment on this, but hinted that the government might rely on additional funding to increase access to administrative facilities.

In future, she said, the ministry hoped to travel to rural areas and visiting entrepreneurs who were not able to travel. “It is about us beginning to adjust ourselves,” she said. “If you step outside of Cape Town, Johannesburg and Bloemfontein, it’s a nightmare. It’s about bringing those services to the people – Sefa (Small Enterprise Finance Agency) and Seta (sector education training authorities) – creating mobile offices that can do what Home Affairs did; go to the most rural of rural areas. It’s one of the things we must think hard about, but right now we don’t have the resources. If the FDIs contributed towards that, how many people could have their own private shops and legal services?”

Ultimately, however, job creation across the board would require rebuilding trust in government projects, she admitted. “If we truly want to build the economy, which is not doing very well at the moment, we need to acknowledge that there is a deficit of trust.” DM

Photo: Lindiwe Zulu (GCIS)