In the spirit of the New Year, a time for reflection and prioritising what matters, I think it’s apt to discuss the very salient topic of why women need money. More specifically, the necessity for increased funding for women-led businesses and why we need to close the gender wealth gap. As we all know, cash is king.
Over the past 100 years, women have made tremendous progress. Despite these advancements, there is still an astonishing 105 trillion-dollar wealth gap between women and men (Oxfam, 2024). At the current rate of progress, this gap will take 135.6 years to close (WEF 2021). I don’t know about you, but I frankly can’t wait that long.
Firstly, why the disparity? And secondly, what are the ramifications and how can we course correct? “Catch 22”, a satirical war novel by Joseph Keller, is also the term given to a paradoxical set of circumstances from which it is difficult to escape. Women need money to make money. Without sufficient capital, they cannot scale their businesses adequately. Without businesses and the funds to scale those businesses, women cannot generate the wealth they need to advance economically, perpetuating an inequality hindering economic and societal growth. I hope you can see the conundrum.
Let us tackle the pink elephant in the room: the staggering wealth gap of US$105 trillion. This significant disparity stems from several factors, including income inequality, career interruptions due to childbirth, most primary carers being women, limited access to financial resources, reduced investment activity and occupational segregation. Yes, women now have greater opportunities to work and achieve economic independence, but many systemic inequalities often hamper this progress.
One way to rapidly bridge this gap is to ensure that women-led businesses receive adequate funding. Africa has a vibrant community of women entrepreneurs, with 1 in 4 women in sub-Saharan Africa being entrepreneurs. If women-led businesses were to receive adequate funding, it would significantly boost Africa’s economic development and, quite honestly, transform our continent. Entrepreneurship is a powerful catalyst for economic development. Not only does it fuel economic growth and innovation, it also creates jobs and provides solutions to some of the more pressing challenges humanity faces, such as climate change, financial inclusion, and healthcare to the world’s poorest and most vulnerable populations.
In 2023, African women-led start-ups received a mere 2% of total venture capitalist funding. In 2024, this was 1%. Male-led ventures received 98% of funding (Africa: The Big Deal, 2025), marking the lowest share of funding received by female founders to date. James Boorman of the Lioness Africa, a 1.8 million+ community of women entrepreneurs in Africa, highlighted this disparity in response to my previous article, Where Are the Women?, referencing the 2022 Pitchbook data that shows only 2% of VC and PE funding goes to women-founded businesses. Boorman also noted that high collateral requirements across Africa disproportionately affect women due to historical barriers in land ownership and inheritance, barriers that have also contributed to the wealth gap.
Women-led businesses remain critically stunted due to inadequate funding and access to capital. The African Development Bank estimates a $42 billion financing gap for African women entrepreneurs, which explains why, although Africa has produced nine unicorns since 2019, none are solely founded by women. Catch 22: women need money to make money. Globally, this funding inequality isn’t unique to Africa. In 2023, UK male-led businesses received 6.2 times more funding than female-led ones. In the U.S., women own 39.1% of businesses (Wells Fargo, 2024) yet receive just 2% of VC funding. Interestingly, when a female-owned company includes a male co-founder, the percentage of VC funds increases, as male investors tend to favour male-led companies.
Although the venture capital ecosystem has some way to go with gender equity, there has been a rise in women-led venture funds and angel investor networks globally. African women-led funds like Ajim, Janngo, Aruwa, and Alitheia Capital work to close this gap by supporting women-led businesses. For instance, 56% of Janngo’s, 73% of Alitheia’s IDF and 77% of Aruwa’s portfolios are women-owned/led ventures. The effects of gender lens funds are wide-reaching: more jobs for women, increased economic power for women, and more women in leadership both at the board level and management level. For example, Alitheia’s website states the traction generated through its portfolio has created over six million jobs for women and access to essential services for 51 million women and girls.
When speaking with female entrepreneurs, a recurring issue often cited is the lack of funding. Akudo Iheakanwa, founder of Shekudo, a women’s shoes, bags and accessories brand proudly showcasing a range of Nigerian craftsmanship, highlighted this challenge during my recent interview with her on Her Journal. Despite her brand achieving a 10,000% return on its initial investment and attracting thousands of global customers, she noted attracting funding is difficult for women-owned brands even when, like her, they have traction. She also spoke about the significance of funding, that without investment and structured support, many businesses face significant challenges in meeting growth milestones, leaving them struggling to scale effectively, an issue Shekudo is grappling with, a model that is neither sustainable nor conducive to long-term success.
The need for greater financial support for women is evident. By channelling adequate capital to women-owned businesses, we ignite innovation, empower communities, and foster a more sustainable future. Funding women-owned businesses also means economic empowerment for women, which means more financial independence, better education and career advancement, improved societal well-being, bigger businesses, more investments, particularly in women-led businesses, retirement security, and, of course, closing the gender wealth gap.
