Businesses owned by females have increased to over 40 percent in Kigali ecosystem, leapfrogging the global average that lingers somewhere between 10 and 20 percent, according to a new study.
From 403 startups interviewed in the study titled Connecting the Kigali Entrepreneurial Ecosystem, 41 per cent had at least one female founder or co-founder.
Conducted by Credit Swisse, a global financial services company based in Switzerland, the survey involved 461 participants from Kigali, of which 402 were entrepreneurs while 59 were Entrepreneurial Support Organisations (ESOs).
The survey wanted to understand the ecosystem through social network analysis (SNA).
Eventually, the study points out that gender gap in entrepreneurship is less pronounced in the city than in any other ecosystems around the world.
The role of support organisations
Narrowing down the disparity mirrors a growing ecosystem over years, opening up for entrepreneurial support organizations (ESOs).
ESOs are organizations designed to stimulate entrepreneurship, such as accelerators, incubators and co-working space.
According to the report, the number of ESOs increased with the number of entreprises.
In fact, Kigali is home to over 20 ESOs currently, and more than 41,000 enterprises according to a 2017 census by the National Institute of Statistics of Rwanda.
This, in turn, translates into one ESO per 20 entrepreneurs or 2,000 university graduates in the country, which gives the ecosystem one of the highest ratios per inhabitants globally.
However, the study spotted a duplication of services offered by these organizations and shrinking in support to businesses at expansion stage, a challenge preventing the enterprises to grow vertically.
"Attending an incubation programme to set up my business has been highly beneficial for me. But once I started generating revenues and was looking at how to further grow my business, I didn’t find the support I needed,” one social entrepreneur is quoted in the report saying.
But Tabhim Uwizeye, founder of Olado, an online retail mart said the organisations are having a positive impact despite the challenges.
"Incubators give you orientation from the idea and prototype to a finished product. They give you visibility, connecting you with potential partners or investors,” said the entrepreneur, adding " they help you to establish a strategic operation like a real company.”
With most ESOs offer their services free of charge, the study questions the quality of what entrepreneurs gain and the potential of their businesses in a donor-centric environment.
Uwizeye observed the ESOs are facing challenges because most of them are "startups”, too.
Limited interaction still a barrier
Emphasizing that an ecosystem thrives when people and resources are connected, the study found there is low level of interaction among businesses as well as with potential investors.
As a result, entrepreneurs end up missing out on external financing opportunities.
In sector terms, entrepreneurs engaged in ICT and agriculture have the highest number of support programmes, in contrast to retail and tourism.
However, with more than 75 percent not having access to external funding, financing for early-stage businesses remains a challenge to Kigali startup ecosystem.
But the big majority of them has an impressive record of creating new jobs.
Commenting on the study, Aneth Batamuliza, entrepreneur and research lead stressed a need of community effort to grow Kigali’s business environment.
"Our ecosystem is constantly evolving with new players on the ground, both entrepreneurs and ecosystem supporting organizations,” she said.
"To bring the entrepreneurship ecosystem a step farther, we must all work together, collaborate, identify gaps and effectively push towards the ideal ecosystem that we would wish to build.