By Geraldine C. Nzulumike
Supporting Women Entrepreneurs for Sustainable Economic Growth: Bridging the Gender Finance Gap
Introduction
Women entrepreneurs play a central role in Nigeria’s economy. From micro-businesses in local communities to innovative enterprises in technology, agriculture, and retail, women are building businesses that provide jobs, strengthen families, and foster resilience. According to Women’s World Banking, Nigeria has over 23 million women entrepreneurs, representing 41% of the country’s micro-businesses. This makes Nigeria one of the most active countries in the world for female entrepreneurship.
Although women are leading in numbers, they continue to lag in access to finance. A Business Day survey revealed that 90% of Nigerian women aspire to start a business, but more than 57% cite lack of funding as their biggest challenge. Even established women-led businesses often find it difficult to access affordable capital for expansion.
This financing gap is more than a matter of fairness. It represents a missed economic opportunity. The World Bank and the African Development Bank have estimated that gender-inclusive financing would boost GDP growth by up to 20% globally. For Nigeria, bridging the finance gap requires not only financial innovation but also supportive legal, regulatory, and policy frameworks. This article explores the financing challenges women entrepreneurs face, why closing the gap matters, and how legal tools can be harnessed to support sustainable growth.
The Reality of Women’s Access to Finance
Despite their growing presence in entrepreneurship, women often encounter systemic barriers that hinder access to finance. These include:
- Loan Collateral Challenges
Many women cannot meet collateral requirements because land and property ownership in Nigeria disproportionately favours men. Customary inheritance practices often exclude women, leaving them with limited tangible assets to secure loans.
2. Legal and Regulatory Barriers
While Nigeria has made progress, regulatory and legal barriers persist. For example, although the Companies and Allied Matters Act (CAMA) simplifies business registration, many women remain in the informal sector due to a lack of awareness or resources to comply. Also, before the Secured Transactions in Movable Assets Act (2017), businesses without land titles found it difficult to obtain credit. Women were disproportionately affected because they rarely owned landed property.
3. Cultural and Social Bias
In some cases, lenders and investors view women-owned businesses as riskier ventures, a perception shaped more by stereotypes than by data.
These challenges create a cycle where women entrepreneurs operate on smaller scales, depend on informal funding, and struggle to expand.
The Cost of Excluding Women from Finance
Excluding women entrepreneurs from adequate financing has far-reaching consequences:
- Economic Growth Loss. The African Development Bank estimates a $42 billion annual credit gap for women in Africa, eroding GDP by up to 7.5% annually.
- Missed Business Opportunities. By sidelining women, financial institutions miss out on viable clients and profitable markets.
- Slower Social Development. Denying women finance reduces reinvestment in health, education, and community development.
- Legal Non-Compliance Risks. Section 42 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) prohibits discrimination, including gender-based discrimination. Financial exclusion of women may therefore raise concerns under both domestic and international human rights obligations, such as the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), which Nigeria has ratified.
Pathways to Inclusive Financing
For women entrepreneurs, the real question is not whether financing exists, but whether it is accessible and tailored to their needs. Closing the gender finance gap, therefore, means developing practical tools that women can use to grow their business, secure loans on fair terms, and compete on equal terms. Encouragingly, some initiatives are already paving the way, offering opportunities that women can tap into.
- Microfinance and Cooperative Lending
Microfinance banks and Cooperatives can provide smaller, collateral-free loans that women can access. However, their reach and impact remain limited without regulatory support and scaling.
2. Fintech and Digital Lending Platforms
Technology-driven platforms are reducing barriers by using transaction history and digital footprints as alternatives to traditional collateral. However, these models create legal and compliance considerations, particularly around data protection and consumer rights.
3. Government and Development Programmes
Programmes such as the Bank of Industry’s Gender Desk, the Development Bank of Nigeria’s interventions, and the Central Bank of Nigeria-backed credit schemes are targeted at women-owned businesses. However, accessibility, transparency, and enforcement remain significant challenges.
4. Mentorship and Capacity Building
Access to finance is not just about credit but also about capacity. Mentorship programmes help women understand compliance, business structuring, and legal requirements that improve creditworthiness.
Building a Gender-Responsive Financing Ecosystem
To close the gender finance gap sustainably, reforms must go beyond isolated initiatives. A holistic approach requires legal, financial, and policy interventions working together:
- Strengthening Legal Frameworks
Strengthening the legal framework requires the effective use of the Secured Transactions in Movable Assets Act (2017), which enables women to leverage movable property as collateral in securing credit. It also involves the enforcement of anti-discrimination provisions in financing, ensuring that lending practices align with constitutional guarantees and Nigeria’s obligations under international law. In addition, simplified processes for business registration and tax compliance under CAMA are essential to bring more women into the formal economy, thereby improving their access to finance and long-term sustainability.
2. Regulatory Oversight
Regulators such as the CBN and the Federal Competition and Consumer Protection Commission should monitor lending practices to prevent gender-based exclusion.
3. Public-Private Partnerships
Collaborations between financial institutions, government, and civil society can drive gender-lens investment products tailored to women entrepreneurs. Legal frameworks are critical in structuring these partnerships and ensuring accountability.
4. Legal Advisory and Support
Law firms are well-positioned to help build a gender-responsive financing ecosystem by guiding women through the legal and regulatory requirements that often act as barriers to funding. They support women entrepreneurs directly by assisting with business structuring, contract negotiation, and intellectual property protection, all of which enhance the credibility and bankability of women-led enterprises. On the institutional side, law firms advise financial institutions on compliance with anti-discrimination and inclusive financing laws, ensuring that their practices align with both local regulations and international standards. In this way, legal advisory services not only protect women entrepreneurs but also actively open the doors to sustainable growth and fairer access to capital.
Conclusion
Bridging the gender finance gap is a smart economic strategy. Supporting women entrepreneurs strengthens families, communities, and the national economy. However, achieving this goal requires aligning financial innovation with enabling legal frameworks and regulatory enforcement.
As Nigeria and other economies strive for sustainable growth, empowering women entrepreneurs must remain a top priority. Legal tools such as constitutional protections and commercial law reforms can help dismantle structural barriers and create an inclusive financing ecosystem. By bridging the gender finance gap, we all contribute to building a stronger, fairer, and more sustainable economy.
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