Business Partners Limited has launched a new fund designed to support women-owned businesses that struggle to access finance through traditional finance institutions.
The fund launches at the right time as a recent survey revealed that South Africa’s pool of female entrepreneurs is shrinking as they contend with a hostile business environment.
The Basadi-Women Growth Fund, valued at R90 million, targets formal small and medium sized enterprises (SMEs) with at least 50 percent female ownership and with an annual turnover of less than R20 million. Eligible women entrepreneurs can apply for loans ranging from R250 000 to R5 million. The finance can be used for property acquisition, working capital, equipment or asset finance, acquisitions or takeovers, as replacement finance or to buy a viable start-up franchise.
René Botha, regional investment manager at Business Partners Limited, says the fund aims to bridge major gaps in the support for female entrepreneurs in South Africa. Research from Women Entrepreneurship in SA Report shows that only 4,1 percent of women start businesses compared to 7,9 percent of men, highlighting the urgent need for targeted interventions.
Women entrepreneurs who do start their own businesses face stronger headwinds than their male counterparts. Research shows that more women cite lack of access to finance as a major hurdle than male entrepreneurs. In addition, family responsibilities and lower profitability also hit women entrepreneurs harder than men.
As a result, women-led businesses grow at a significantly slower pace. According to René, only 4,9 percent of women-owned ventures reach a headcount of 20 or more employees versus 11,8 percent for male-owned ventures. “We have introduced the Basadi-Women Growth Fund because appreciate that we need to cultivate an inclusive entrepreneurial environment for women to experience the same level of growth and opportunity as men,” says René.
Clients of the Basadi-Women Growth Fund will also gain access to Business Partners Limited’s well-established mentorship and Technical Assistance programme, and its entrepreneurship networks. This kind of targeted support for women businesses is urgently needed, says René. The GEM SA Special Report: Women’s Entrepreneurship in South Africa revealed recently that more women are exiting their businesses than starting new ones.
A key driver of this attrition is access to finance. 21,5 percent of women entrepreneurs cite difficulty securing funding as the primary reason for business failure, compared to 17,2 percent of their male counterparts.
The same report shows that 21,5 percent of women entrepreneurs gave family responsibilities as the reason for leaving their businesses, compared to 12,1 percent for men. “Many women still shoulder the greater burden of home and family care, and this demand often conflicts with the demands of running a business and may influence how their finance applications are reviewed,” René explains.
She adds that to truly level the playing field, we require financing that applies a gender lens to investment decisions, recognising these unique challenges and opportunities.
René says the Basadi-Women Growth Fund financing is competitively priced with terms structured to ensure sustainability and growth potential. A true gamechanger is its flexible structure: women-owned businesses benefit from the option of an interest capitalisation or a repayment moratorium of up to six months.
Finance applications can be submitted online, where applicants will find a list of criteria and required documents. Go to https://www.businesspartners.co.za/basadi-women-growth/
About the Author: René Botha
