Why African women entrepreneurs remain overtrained and underfunded

Meet Carolyne Kirabo, the founder and managing partner of M-Kyala Capital, a women-focused venture fund. She recently met an East African woman entrepreneur who had completed eight accelerator programmes and still hasn't received any investment. This entrepreneur, like many others, has been trained on how to refine her pitch, persuade investors, and draw a business model canvas. But the training hasn't translated to funding, leaving her stuck in a cycle of overtraining and underfunding.

The experience of this entrepreneur is a symptom of a broader issue in Africa's gender-finance industry. Banks, development organisations, and investors have created initiatives to help women become better business owners, but few provide the capital their businesses need. Instead, they offer mentorship, financial literacy, and investment training that may not be addressing the root cause of the problem. Kirabo calls this approach "generic," suggesting that it's not solving the real issue but rather treating the symptoms.

The industry has a convenient diagnosis for the funding gap: women-owned businesses struggle to raise money because their founders lack confidence, financial knowledge, collateral, or the ability to build investable companies. Kirabo argues that this diagnosis has allowed the financial industry to place the burden of exclusion on women. By focusing on what women lack, the industry avoids taking responsibility for its own shortcomings. Kirabo worries that this narrative is perpetuating a damaging stereotype: even where capital might want to reach women, they just don't have the capacity.

The funding gap for women-owned businesses in Africa is estimated at $42 billion, according to the International Finance Corporation (IFC). This staggering number highlights the scale of the problem. However, the industry's response has been to create a large and lucrative market for training and mentorship programmes. These programmes are often focused on teaching women how to draw business models, pitch their ideas, and persuade investors. While these skills are undoubtedly valuable, they may not be addressing the underlying issue of a stubborn financing shortage.

The result of this approach is a cycle in which women are repeatedly prepared for funding that never comes. Each failure to raise capital is treated as evidence that they require another course, rather than a signal that investors and lenders may be unwillingor poorly equippedto finance them. This cycle is not only frustrating for the entrepreneurs but also perpetuates the stereotype that women are lacking in some way. Kirabo suggests that the industry needs to take a more nuanced approach, one that listens to the needs of women entrepreneurs and designs solutions that address the real issues.

Kirabo proposes a more targeted approach, one that focuses on providing the capital that women-owned businesses need. She argues that this requires a fundamental shift in the industry's approach, one that prioritizes funding over training. By doing so, the industry can break the cycle of overtraining and underfunding and provide the support that women entrepreneurs need to succeed.