SheMeansBusiness: Finance Still A Hurdle For Female Entrepreneurs In Nigeria’s Largest City

Published 1 month ago
By BrandVoice Partner | Paid Program | Oluwatomisin Amokeoja
African woman in traditional clothes standing, looking, hand to eyes, in field of barley or wheat crops at sunset or sunrise
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In Africa’s biggest economy, where women constitute about half of the 213.4 million population, a gender gap persists in entrepreneurial opportunities. Only around 35% of women are involved in entrepreneurship, ranging from micro to large enterprises.

According to a United Nations (UN) report from 2020, only 47% of women of working age participated in the labor market, compared to 74% of men — a gender gap that has remained relatively constant since 1995.

Despite contributions to the Micro, Small and Medium Enterprises (MSME) ecosystem, female entrepreneurs face substantial challenges, with finance being a major hurdle in Nigeria’s largest city, Lagos. A survey by the Lagos State Employment Trust Fund (LSETF) reveals that female entrepreneurs contribute 35% to employment generation in the MSME ecosystem within the state. MSMEs face an annual funding gap of about ₦617 billion ($678 million) nationwide, with female-owned businesses being more affected by limited access to funding and investment opportunities, according to PwC Nigeria’s estimate.


The Gender Discrepancy

“Accessing finance, especially loans, for whatever reasons, is usually not easy for both males and females. However, based on my experience and interactions with my colleagues, it is even more tedious for the female folks,” shares Chidiebere Imadu, a clothier based in the Isolo area of Lagos, highlighting the daunting reality for many women like her.

Statistics And Confirmation

In Africa, the employment landscape for women is closely linked to their self-employment, with eight out of 10 women in sub-Saharan Africa working independently, nearly double the global average, as reported by the World Bank. A majority of these women operate micro-enterprises within the informal sector, and very few are integrated into formal banking channels. This lack of financial inclusion prevents them from accessing affordable credit, hindering the growth of their businesses and perpetuating the cycle of poverty. The African Development Bank Group notes a $42 billion financing gap for small and medium-sized enterprises owned by African women, posing a significant obstacle to economic development and overall wellbeing.


The UN reports that 52% of women-led firms identified access to finance as a major constraint to growth, compared to only 30% of male-led firms. Similarly, 56% of female entrepreneurs reported being rejected in their most recent loan applications, opposed to merely 17% of men. The main reason women have trouble accessing finance is due to gender gaps in asset ownership, as loan sizes are determined based on the collateral that the borrower can provide. Social norms, inheritance, and marriage practices often result in household assets being owned by men.

Lagos State, like other parts of Nigeria, has common gender norms that affect women’s economic empowerment, such as the expectation that men should be the key decision-makers in their families and communities, and the lack of social protection for women, which leaves them without the necessary capital to securely invest in businesses.

This challenge intertwines with the National Library of Medicine’s study which links maternal mortality to education levels, emphasizing that higher maternal education correlates with improved access to household resources and healthcare. Unfortunately, Nigeria faces a significant literacy challenge, with 39% of adults being uneducated, perpetuating barriers to healthcare for women.

Financial hurdles pose a substantial obstacle to healthcare access, as evidenced by the National Population Commission (NPC) and International Coaching Federation (ICF) Macro’s report, revealing that 56% of women experience financial barriers, while one-third face physical and resource-related obstacles.


The National Literacy Survey of 2010 exposes a critical gender disparity in literacy rates, emphasizing the need for focused attention on female literacy, as males consistently outpace females across categories, with the national adult literacy rate in any language standing at 71.6% (male = 79.3%, female = 63.7%).

A survey by NOIPolls emphasizes the prominence of financial empowerment issues amongst women, particularly in the South-West zone, with Lagos State, the economic hub, playing a pivotal role in shaping responses.

The survey further unravels a myriad of socio-economic challenges faced by women, ranging from gender inequality and cultural discrimination to sexual abuse, gender discrimination in employment, religious discrimination, physical abuse, domestic violence, and rape.

Individual Struggles


Kuburat Aworeni, a food distributor dealing in the retail of rice and other staples in the Ikorodu area of Lagos, shares her struggle: “Securing the finance I need for my business has been challenging due to the extensive documentation required by the banks I have approached. This makes it nearly impossible for small businesses like mine to thrive.”

She expresses her frustration, saying, “I put my heart into my business, but without financial support, expansion feels like an unattainable dream. It’s disheartening to see opportunities slip away because of criteria I am unable to meet.”

Despite setbacks, Kuburat remains hopeful: “I aspire to grow and employ others, but financial barriers hinder that. It’s a tough journey, but I won’t give up.”

“What has kept me going is the passion for my business and the support of my loyal customers,” says Aworeni. “I couldn’t allow financial challenges to stop me, so I have had to explore alternative means, including savings and contributions with a trusted group, to keep my customers satisfied and maintain my business.”


Bridget Aletor, a baker based in the Oshodi area of Lagos, shares her financial challenges: “Starting my baking venture was a dream, but the reality hit hard. Securing funds for space and equipment was difficult, and the conditions set by banks were overwhelming.”

She opens up about the struggle, saying, “Already from the conditions set by many financial institutions, the idea of a bank loan was intimidating, so I turned to family and friends for support. It’s a tough journey for a female entrepreneur in Lagos.”

Determined to persevere, Aletor declares, “My story, like that of many other women, is one of resilience. I believe in my craft, and I refuse to let financial barriers hinder my passion for baking.”

Chidiebere Imadu, a clothier based in the Isolo area of Lagos, notes, “It takes a lot of grit for females to access finance around here because we are often subjected to unfair conditions,” a sentiment reinforced by a World Bank Group market diagnostic.


Supporting Initiatives

Efforts have been made to bridge the gap, with initiatives like the “W” initiative unveiled in 2014 by Access Bank providing opportunities, including access to loans and credit facilities for female entrepreneurs in Nigeria.

Early last  year, at the Access Bank International Women’s Day (IWD) Conference held in Lagos, Abiodun Olubitan, the Group Head of W Initiative at Access Bank, disclosed that “the bank gave out N40.5 billion to over 64,845 women SMEs in 2022.”

The funds, according to Olubitan, were allocated to women in businesses where they held 50% or more ownership of the business, or co-owned with a man, with controlling shareholding or active involvement in directing the business, aligning with the bank’s criteria for identifying women-owned or women-led businesses.

Overall Consequences

Financial inequalities for female entrepreneurs in Lagos lead to limited access to capital, reduced business expansion opportunities, and a perpetuation of gender disparities in economic empowerment. This continues to hinder the growth of women-led businesses, limit job creation, and contribute to a broader cycle of economic inequality within the region. Addressing these disparities is crucial for fostering a more inclusive and sustainable business environment.

Lagos State Government Addresses LSETF Partnership And Other Ongoing Initiatives For Female Entrepreneurs

In response to observations suggesting a hiatus last year in the Women Entrepreneur Fund (W-initiative) loan scheme, established in 2019 by the Lagos State Employment Trust Fund (LSETF) in collaboration with Access Bank, Commissioner for Information and Strategy, Gbenga Omotoso, acknowledges the evolving nature of loan programs..

While Omotoso could not confirm the current status, he emphasizes the dynamic nature of loan initiatives. “Loans are not just something you continue to give out. They are evolving,” he says.

“Beneficiaries need to pay back for others to get their own funds. It’s not something that you give to just a particular group and then you forget it. You have to recover the money so that more and more people can get funds. So, I know that we did a lot.”

Addressing the impact of COVID-19 on small businesses, particularly in the hospitality sector, Omotoso reveals, “During COVID-19, small businesses and especially the hospitality industry really suffered. We provided over ₦1 billion ($1.1 million) for such businesses, including medium and small-scale enterprises run by women.”

Highlighting the commitment to supporting women in various sectors, Omotoso states: “In agriculture, too, there are special programs for women to have access to small funds that can help them. All our women who are in fishing and other agricultural programs get priority.”

“There is no financial program initiated by the Lagos State government where women don’t have a hand. We ensure that women actively participate in and benefit from various financial support initiatives,” notes Omotoso.

Call For Comprehensive Measures

Subomi Plumptre, a Lagos-based entrepreneur, emphasizes the need for comprehensive measures.

Plumptre shares: “Recent data underscores significant hurdles to credit and finance for female entrepreneurs in Lagos. According to the World Bank, only 10-15% of them get suitable bank credit due to collateral requirements and high-interest rates. Innovative solutions, like microfinance institutions and programs such as We-Fi, are emerging to address these challenges.

“To further overcome these barriers, we need comprehensive measures such as financial literacy programs, alternative collateral options, and tailored government policies for women entrepreneurs. These initiatives are discussed in detail by Nord Open Research and OpenAIR@RGU. Such interventions will contribute to creating a more inclusive and supportive financial landscape for female entrepreneurs in Lagos.”

For multinational tech consultant Napa Onwusah, a beacon of hope emerges from the Nigerian government’s initiatives, such as the Micro, Small and Medium Enterprises Development Fund (MSMEDF) and National Collateral Registry (NCR). “Equally promising are the endeavors of non-governmental organizations and private sector actors, offering financial literacy training, mentorship programs, and alternative financing options,” Onwusah says.

She adds: “Recently, I was privileged to be part of Ventures Platform’s ‘Leveling VC’ initiative — a multi-year and industry-wide project — to raise venture capital funding for African startups led by female founders from 13% to 25% by 2028. I believe initiatives like this play a crucial role in ensuring an even access to business funds.”

Onwusah recommends a multi-pronged approach which involves “advocating for gender-sensitive policies, empowering women through tailored financial literacy programs and products, investing in capacity building, unlocking data-driven solutions, and fostering a collaborative ecosystem that propels growth.”

– This report was facilitated by the Africa Centre for Development Journalism (ACDJ) as part of its 2023 Inequalities Reporting Fellowship supported by the MacArthur Foundation through the Wole Soyinka Centre for Investigative Journalism.

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