On March 8, the world celebrated International Women’s Day. This year, the world focuses on the march to tear down gender bias.

However, as we enter this day, there are signs that celebrations should remain subdued because many women recently have faced traumatic shocks to their economic status, primarily due to Covid-19. Sadly, industries that saw the largest downturns also have higher female participation rates, meaning that Covid-19 has disproportionately affected women.

This means, over the past two years, women have not only had to deal with systemic biases but have also had to adapt to pandemic-related challenges. Unfortunately, for some women entrepreneurs, these obstacles were a breaking point.

An uphill battle for women in Africa

Female entrepreneurs are not the minority, they account for 58 per cent of the continent’s self-employed population. Yet, ingrained biases on their business skills, technical capabilities and even leadership hold back business growth. We might think these biases don’t exist, but they do.

The World Bank estimates that that 70 per cent of women-owned SMEs in developing countries are excluded from accessing funds from traditional financial institutions, which means that women-owned or led SMEs face a credit deficit of up to US$300 billion per year. Compounding this deficit is that women entrepreneurs in developing nations typically face a crisis of confidence, leadership deficiencies and a lack of technical knowledge.

We now have a better idea of what this costs, with the World Bank suggesting that women-owned or led SMEs are a third less profitable than male-owned businesses in comparative sectors. Biases prohibit growth and potential.

There is a need for a different approach to removing prejudices to drive sustainable benefits to women in a significant, measurable, and scalable way.

 A simple equation: consider women to break the bias

To advance gender equality and break biases, we need to tailor investments to account for women’s distinctive circumstances.

So what can investors do differently to break the bias? Here is a tried and tested five-point plan.

One, decrease investment sizes to accommodate the smaller-size of women-led businesses. Smaller ticket sizes have the dual benefit of lowering funds at risk for the investor while increasing accessibility for women entrepreneurs.

While lowering ticket sizes will improve accessibility, women still face confidence gaps when applying for financing. We have seen 80 per cent of women entrepreneurs self-select out of funding primarily due to a crisis of confidence. Yet, applicants do not face the same confidence hurdles when the investment window is ring-fenced for women. This leads to our second recommendation: support more women-only funds, programmes or investment windows.

Three, there needs to be more investment into supporting women entrepreneurs to build attractive business plans, robust financial models, and business leadership skills. Across Africa, there remains a capability gap in running businesses, typically driven by lower educational attainment levels and fewer business opportunities. African women have no deficit of good ideas; however, some cannot conceptualize these into robust and executable plans.

Only with the right direction can women entrepreneurs unlock their businesses’ potential by investing in women’s core entrepreneurial capabilities and skills.

In fact, we have seen explosive growth in women-led businesses after they receive technical assistance. For example, Virginia Sibanda, the CEO of VIRL financial services, a micro financier based in Zimbabwe. She received tailored support from finance and leadership advisors. As a result, Virginia and VIRL better managed the business’s financial position. In addition, combining financial advice with leadership advice accelerated Virginia’s ability to engage potential investors from a place of confidence. Virginia continues to attest that "obtaining the right advice changed how I run my business, how I lead and has placed me on the path to success”.

Four, contractual terms should be flexible to the realities of women entrepreneurs and their lower propensity to raise matching funds or follow-on investment within stipulated timeframes.

Five, focusing investments on entrepreneurs and businesses that positively impact women’s economic empowerment can result in a multiplier effect on reducing female bias and increasing empowerment.

Investing in women is a slow road but pays dividends

We should not underestimate the energy needed to break these biases.

Over the last few years, there has been an increase in women-led funders and funds earmarked for women-led businesses. These are all designed to ensure that women-led SMEs can secure and utilize the available funding.

However, the amounts of allocated funds remain scarce. With women-owned or led businesses generally outperforming the market, this lack of funding will constrain Africa.

Only through the collective will of all stakeholders to break down biases, women entrepreneurs will finally be able to operate in a favourable business environment, access affordable funding, and have the right skills, information, and networks to ensure they take their rightful place in Africa’s economic development journey.

The writer is the Chief Executive Officer, AECF.

The views expressed in this article are of the writer.