The Role of Financial Institutions in Bridging the Financing Gap for Women Entrepreneurs in Sub-Saharan Africa

Bridget Irene (), Elona Ndlovu, Palesa Charlotte Felix-Faure, Zikhona Dlabatshana and Olapeju Ogunmokun
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Bridget Irene: Leicester Castle Business School, De Montfort University, Leicester LE1 9BH, UK
Elona Ndlovu: BizPreneur, 1122 Burnett Street, Hatfield, Pretoria 0083, South Africa
Palesa Charlotte Felix-Faure: IDRAC Business School, 11 Rue du Tour de l’Eau Saint-Martin-d’Hères, 38400 Lyon, France
Zikhona Dlabatshana: Faculty of Management and Commerce, University of Fort Hare, East London 5200, South Africa
Olapeju Ogunmokun: Leicester Castle Business School, De Montfort University, Leicester LE1 9BH, UK

Administrative Sciences, 2025, vol. 15, issue 8, 1-24

Abstract: Small and Medium Enterprises (SMEs) are vital to economic growth, innovation, and job creation across Sub-Saharan Africa (SSA). Women entrepreneurs are key contributors to this sector, yet they face persistent barriers to accessing finance, which constrain their business growth and broader economic participation. This study investigates the role of financial institutions in closing the financing gap for women-owned SMEs and assesses the effectiveness of various financing mechanisms, including traditional banking, micro-finance, fintech innovations, and government-backed credit schemes. Adopting a quantitative approach, this study utilises structured surveys with women SME owners across multiple SSA countries. Supplementary secondary data from sources such as the World Bank and national financial statistics provide additional context. Econometric modelling and Structural Equation Modelling (SEM) are employed to identify key factors influencing loan accessibility, such as collateral requirements, interest rates, financial literacy, and the regulatory environment. Findings reveal that high collateral demands and interest rates remain major obstacles, particularly for smaller or informal women-led enterprises. Financial literacy emerges as a critical enabler of access to credit. While fintech solutions and digital lending platforms show promise in improving access, issues around infrastructure, regulation, and trust persist. Government-backed schemes also contribute positively but are hindered by implementation inefficiencies. This study offers practical recommendations, including the need for harmonised regional credit reporting systems, gender-responsive policy frameworks, and targeted financial education. Strengthening digital infrastructure and regulatory support across SSA is essential to build inclusive, sustainable financial ecosystems that empower women entrepreneurs and drive regional development.

Keywords: SME financing; financial inclusion; fintech solutions; credit accessibility; economic development (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2025
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