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

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Listed:
  • 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)

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.

Suggested Citation

  • Bridget Irene & Elona Ndlovu & Palesa Charlotte Felix-Faure & Zikhona Dlabatshana & Olapeju Ogunmokun, 2025. "The Role of Financial Institutions in Bridging the Financing Gap for Women Entrepreneurs in Sub-Saharan Africa," Administrative Sciences, MDPI, vol. 15(8), pages 1-24, August.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:8:p:323-:d:1725588
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    References listed on IDEAS

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    1. Lyn S. Amine & Karin M. Staub, 2009. "Women entrepreneurs in sub-Saharan Africa: An institutional theory analysis from a social marketing point of view," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(2), pages 183-211, March.
    2. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    3. Sabyasachi Tripathi & Meenakshi Rajeev, 2023. "Gender-Inclusive Development through Fintech: Studying Gender-Based Digital Financial Inclusion in a Cross-Country Setting," Sustainability, MDPI, vol. 15(13), pages 1-34, June.
    4. Vani Tanggamani & Azlina Rahim & Hamidah Bani & Nor Ashikin Alias, 2024. "Elevating Financial Literacy Among Women Entrepreneurs: Cognitive Approach of Strong Financial Knowledge, Financial Skills and Financial Responsibility," Information Management and Business Review, AMH International, vol. 16(1), pages 279-286.
    5. Razavi, Shahra, 1997. "Fitting gender into development institutions," World Development, Elsevier, vol. 25(7), pages 1111-1125, July.
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