As we celebrate Women’s Month, there’s no better time to put the spotlight on the best resources to gain funding for women’s businesses in South Africa.
While entrepreneurship is nothing new for women, it’s clear that South African women are still at a disadvantage when it comes to securing financial assistance.
Women-led SMEs face hurdles that can make it hard to:
- Convince investors to provide capital
- Pass stringent lending criteria imposed by banks
- Run a business in male-dominated industries
However, knowing what financial assistance and women empowerment funds exist can turn the tide. Continue reading to uncover the different funding options available to women-owned enterprises in South Africa.
The struggle to secure financing for female entrepreneurs in South Africa
Despite women making up half the South African population, only 38% of SMEs are women-led. Balancing the scales and diversifying is crucial in advancing South Africa’s economic growth.
Business Media Mags found that women-led businesses created close to one million jobs between 2018 and 2022 and contributed R175 billion a year to the economy, but that made little difference when it came to accessing capital.
A Harvard University study suggests that social and cultural norms were to blame for a US$42 billion (which is roughly a R777 bilion) financing gap for women in sub-Saharan Africa, even though 40% of African SMEs are women-owned.
As Thobile Nokuthula Radebe, a lecturer at Stellenbosch Business School, shares, “While it is encouraging to see South Africa at the forefront of some positive developments in the women entrepreneurship arena, more needs to be done. If we are to realise the agenda of stimulating female entrepreneurship and increasing the number of sustainable women-owned businesses in SA within the next few years, support will need to come from several fronts.”
How do you get funding for an SME in South Africa?
Knowing how to get business funding in South Africa is crucial, and financial assistance comes in many different forms:
- Asset-based financing
- Business incubators
- Angel investors
- SME funds
- Government funds
- Revolving Capital Facilities
Different financing options have pros and cons and depend on whether your business is a start-up or well-established, the nature of your operations, the amount needed, and your assets.
When applying for funding, financiers often ask for several documents to assess your application, including:
- A detailed business plan
- Financial statements and projections
- Personal and business credit history
- Collateral or security for a loan
- Proof of ownership
- Information on your management team
- Market research and analysis
Understanding the specific requirements for each document will go a long way in knowing how to secure business funding.
What financial support is available for female entrepreneurs in South Africa?
Women’s empowerment programmes are on the rise, which means that more funding and business loans specifically tailored to women in business are now available.
Government funding for women’s businesses in South Africa is one option. Other options include business support from the private sector:
1. Lula’s SME Funding
Lula’s funding solutions are built on saying “yes” more to businesses looking to grow, including women’s entrepreneurship.
The SA-based B2B fintech offers fast access to business funding through its Capital Advance and Revolving Capital Facility, each allowing women in business to seize business opportunities and overcome cash flow challenges.
Repayment terms are transparent, with a low fixed monthly cost and no early repayment penalties, designed to help businesses control their cash flow. Lula offers up to R5 million in as little as 24 hours. There is also an option to withdraw from the Revolving Capital Facility more than once without having to go through an extensive application process (subject to a credit and affordability assessment).
2. Women Empowerment Fund (WEF)
The NEF Women Empowerment Fund focuses explicitly on black women’s empowerment, offering between R250,000 and R75 million to female business owners across different industries.
Funding options for female entrepreneurs make a great contribution through enabling a new generation of black-owned, women-led SMEs.
As Bridget Ngcobo, Strategy & Partnerships lead at Google highlights, “Gender equality and financial inclusion need to be worked on in parallel.” This WEF does this simultaneously with their target funding efforts.
This financial assistance comes in many forms, including shareholder loans and revolving credit.
3. Isivande Women’s Fund (IWF)
The Isivande Women’s Fund propels women’s economic empowerment by offering responsive finance solutions and funding for women’s businesses in South Africa.
The funding helps start-ups and SMEs looking to expand, franchise their operations, or access bridge financing. Women-led businesses can unlock funding from R30,000 to R2 million.
4. AWIEF Growth Accelerator
As an award-winning women empowerment fund, the AWIEF Growth Accelerator champions women’s entrepreneurship through skill-building, mentoring networks and access to funding.
They regularly announce different accelerator programmes across Africa. Taking a holistic approach, each programme provides growth strategy training on top of access to finance.
5. Cartier Women’s Initiative (CWI)
The Cartier Women’s Initiative has been running since 2005. It focuses on uplifting women’s entrepreneurship through funded awards. Managed by Beneficial Returns, this programme operates globally, meaning it is open to grant funding for women’s businesses in South Africa.
It offers grants with preferential interest rates for first-, second-, and third-placed awardees and USD 200,000 (equivalent to R3.7 million) to those who join the CWI fellowship. Beyond funding, it supports human capital through workshops, networking and 1:1 training.
Wingee Sampaio, Global Programme Director at Cartier Women’s Initiative, shares why their programme helps further women’s entrepreneurship: “We know that women entrepreneurs drive business growth and impact. Studies have shown that they help open new markets and diversify supply chains.”
Requirements vary based on their Impact, Regional, Science & Technology and Diversity Awards; however, in general, their criteria are as follows:
- Female applicants must be in a central leadership role
- Early-stage company, between 1-6 years of operation
- Must be a for-profit company
- Applicant must commit to attending their fellowship programme
Since 2006, CWI has supported 330 female entrepreneurs, making it a crucial resource for those seeking funding for women’s businesses in South Africa.
6. Manufacturing Support Programme (MSP)
Knowing how to finance heavy equipment is a major factor in controlling cash flow for manufacturing companies. One way to do this is with the Department of Trade and Industry‘s Manufacturing Support Programme.
The MSP offers a reimbursable grant for projects that are 51% owned and managed by women, youth or persons with disabilities. The objective is to hone operational efficiencies and expand on new manufacturing projects.
This funding helps women gain an edge in a predominantly male-dominated field. Statista shows that while there are roughly 30 million women in South Africa, less than 500,000 work in the manufacturing industry.
The lack of female representation in manufacturing makes these grants vital in representing women in top management positions.
7. The Tourism Transformation Fund (TTF)
The tourism sector leads in gender equality, with a South African Tourism survey finding women make up 51% of the workforce and 45% of ownership.
To further nurture this, The Tourism Transformation Fund, created by the Department of Tourism in collaboration with the National Empowerment Fund (NEF), aims to foster economic growth for black entrepreneurs.
This fund hopes to create a new generation of tourism enterprises and is primed for black women’s empowerment.
Financial contributions are split between the NEF and the Tourism Department, with the department’s contribution limited to 50% of the total funding and capped at a maximum of R5 million.
Their guidelines state that SMEs with significant ownership and participation by black women are given preference.
Financial boosts for female innovators: How Lula supports women-owned businesses
An equal playing field in business funding is better for everyone. Not only is gender inequality still a major ongoing issue, but giving female-owned businesses the support they need helps to grow the South African economy.
Lula makes it easier to secure funding for women’s businesses in South Africa with a digital application form that takes mere minutes to fill out; female entrepreneurs can then:
- Scale their SMMEs without losing momentum
- Enhance business planning by maximising opportunities
- Operate competitively with reliable business funds
Through Lula’s Revolving Capital Facility, you don’t have to reapply once funding is granted (subject to credit and affordability checks), and you only pay for what you use. When challenges arise, there’s Lula’s Capital Advance for bridge financing and to ensure you don’t miss out on growth opportunities.
Securing grants, government funding and gaining access to growth accelerators take time and come with less of a guarantee. Lula’s SME funding balances the need for women’s economic empowerment with speedy solutions.
Want funding within 24 hours? Start with Lula’s business funding calculator to map out your business funding needs and repayment schedule to get started.
Empower your business, empower yourself. Get working capital through Lula’s Revolving Capital Facility to build your business. Apply for funding now!
