Rise of Women Entrepreneurship

ArabNet Team, Mar 08 2017

The entrepreneurship culture in the MENA region is growing, and with governments and companies in the private sector starting to support and encourage women in the work force, women entrepreneurship is thriving and on the rise. Today, women are founding one of every four new startups, according to a report by Al Masah Capital, and managing assets, through SMBs (small and medium-sized businesses) in the GCC, worth $385 billion. While female entrepreneurship is less common in the MENA region (4% of the population) compared to other parts of the developing world (according to a report by the World Bank), firms owned by women in the MENA region tend to be as large, productive, and well-established as their male-owned counterparts. Moreover, Christopher M. Schroeder reported in his book ‘Startup Rising’ that over a third of startups in the region are run by women – a higher percentage than in Silicon Valley.

Women entrepreneurship has increased in many countries in MENA over the past year, and the potential economic benefit is striking with women-led businesses considered to be an important catalyst for job creation and economic development. According to an analytic report and survey by Education for Employment, YouGov and Bayt.com, if women’s participation in labor markets in MENA equaled that of men’s, the regional GDP could rise by 47% over the next decade, and the MENA could realize $600 billion in economic impact annually. Not only do more startups mean more jobs for everyone, but also firms run and owned by women are also more likely to employ other women than firms run by men. Moreover, harnessing more female entrepreneurship benefits the region as a whole; it makes the startup ecosystem richer, more productive and reduces gender disparities.

Motivating Factors

Three years ago, a study conducted by Beschir Hussain, co-founder and CEO of Hellofood, and Ammar Rizvi, Global Strategic Initiatives Lead at Google, examined some of the motivating factors for female entrepreneurs and business owners in MENA.  Of the 121 women entrepreneurs interviewed, it was found that the majority did not start their businesses out of a need for income, but rather because they had identified an opportunity where innovation could solve a problem and wanted to overcome a challenge and gain a sense of achievement.

Women-run tech businesses in the region operate in a wide range of sectors, and tackle diverse issues, problems, and gaps in the market. Chouchic.com, Sara Darwich’s business, falls under the fashion sector and is a website that has flash sales of discounted luxury items with the ultimate must haves from top international brands. Other popular online businesses led by women cater specifically to moms and kids, such as Mini Exchange and MumzWorld, founded by Sarah Jones and Mona Ataya, which are both online marketplaces catering for mother, baby and child products in the Middle East. Finally, some businesses tackle a genuine problem, such as lack of Arabic content online.

Sima Najjar, founder of Ekeif.com, founded her 3rd business (Ekeif.com) after she encountered such a problem. ‘Ekeif.com started when I went online to learn tips and tricks I need to grow my businesses and noticed the lack of Arabic content, so I decided to combine my production experience and passion to learn and started Ekeif.com, the community of short ‘how to’ Arabic videos’. Fida Taher, founder of Zaytouneh which is now Atbaki, also started her business after encountering a similar challenge. ‘I started Zaytouneh back in 2011, when finding good recipes in Arabic online was a challenge, and when video recipes were basically long episodes of cooking shows’.

As for the second and third most relevant motivational factors, they were job satisfaction and independence. Jones started her business Mini Exchange after she felt that her corporate career wasn’t fulfilling enough for her as a long term career. ‘I decided to take the risk and launch my own business. I spotted a gap in the market and started small and gradually we grew both in number and every other aspect too.’

Challenges Women Entrepreneurs Face

Despite the rise in women-led businesses, there are still several barriers that women entrepreneurs face in the region, such as socio-cultural and financial constraints, striking a work-life balance, inadequate training, limited access to information and lack of female-friendly entrepreneurship policies. For one, the low participation rate of female entrepreneurs in the region can partially be attributed to the different cultures, values, beliefs and behaviors that predominate within the region. MENA countries are predominantly male oriented societies, where men are viewed as ‘bread winners’ and women as caregivers/wives/mothers, meaning patriarchal traditions leave women limited in their entrepreneurial efforts.

Another primary barrier and concern for female entrepreneurs is restricted access to funding. In addition to the business environment in MENA being fiercely competitive, the region is inhibited by limited financial resources, and funding opportunities are scarce for startups. A recent study by the IFC estimated that about 70% of female ventures in developing and emerging countries receive no or little funding by financial institutions in order to support and grow their ventures and the lack in funding is approximately $271,000 per women-owned SME. Due to the significant barriers when it comes to securing funding and raising capital, most women entrepreneurs finance their businesses with their own savings or with financial support from family and relatives.

Finally, a common and significant challenge for female entrepreneurs, and particularly mom entrepreneurs, is achieving a work/life balance.  ‘My main challenge was when I was blessed with my first daughter 4 years ago, it was challenging as I had just started my 3rd startup and people expected me to sit at home and leave the business world, […] but I found the balance that I would be happy in,’ says Najjar. Taher also reveals that although difficult, being an entrepreneur and a mother does have its advantages. ‘Motherhood and starting a business taught me how to become the best mother I could be, how to become an expert on time management, and how to set priorities,’ revealed Taher.

Solutions

Accessibility of local and global marketplaces via social media and the Internet is making it easy and exciting for women in the MENA region to develop their businesses. The rise of technology has also helped promote collective innovation and international exchange of ideas, and brought women to the head of the tech-business world. In order to further boost women entrepreneurship in the region, governments and non-governmental organizations must address the challenges women face, introduce a range of empowerment measures and implement programs that support women entrepreneurial initiatives and activities. Fortunately, the MENA region is starting to see more and more of these programs.

One such program is Arab Women’s Entrepreneurship Project which aims to eliminate gender inequality by providing training, mentorship, and other skill-building programs for women. Another program is Google’s ‘#40Foward program’ which gave $1 million to 40 startup organizations (25% of which were in the Middle East) to increase the representation of women in their respective tech communities. A great local example is Gaza Sky Geeks, a seed accelerator and workspace in Gaza City, which provides mentorship and support to startups in Gaza and has recently started focusing on bringing more girls and women into the fold. Currently, about half of the founders of the startup companies that Gaza Sky Geeks mentor are women, and the goal is to reach 80 percent.

Another viable solution for boosting women’s entrepreneurship in MENA is by enabling women to gain special access to ‘women only’ funds, which will not only allow them to compete against each other for funding (rather than compete against men) but also facilitate their transition into the business world. A women-specific pool of funding would push women to explore ideas beyond traditional sectors, to innovate, take calculated risks and unlock rewards for themselves, their families and their societies.

With the help of programs and initiatives like these, women entrepreneurs will fast approach gender equality in the startup ecosystem, improving their local economy and the global economy as well. Providing the perfect compromise, tech startups and e-commerce are allowing women in the MENA region to bring their talents to the business world and pave the way for future economic growth not only in the MENA region, but also in the rest of the world.

 

Comments   

Catch up on what you've missed