Visa and Visa Foundation Aim to Close Funding Gap for Africa’s Female Entrepreneurs

Visa Foundation says it wants to help Africa’s underfunded female-led startups take off.

Visa Foundation announced Thursday (March 2) that it would give $1 million from its $200 million Equitable Access Initiative to help women-owned small and medium-sized businesses (SMBs) in Sub-Saharan Africa grow.

The release cites figures from the World Bank which says that while Africa can claim the highest growth-rate of businesses run by women, those women receive just 1% of venture capital funding.

“Women business owners continue to face challenges that are unique to them — ranging from patriarchy, cultural norms and unconscious bias that impacts women’s ability to access markets, finance, technology and networks,” Visa Foundation said. “The global pandemic further exacerbated these challenges as women-led SMBs were hardest hit.”

PYMNTS examined the challenges facing Africa’s female entrepreneurs last year in a conversation with Janade Du Plessis, general partner at pan-African venture capital (VC) fund Launch Africa Ventures.

The numbers he shared were slightly more grim than Visa’s figures: in 2021, female founders received just 0.7% of fundraising raised by startups in Africa, equivalent to $18 million out of nearly $2.7 billion.

“Today, in 2022, there is capital apartheid against female entrepreneurs in Africa,” DuPlessis told PYMNTS. “Everybody wants to talk about how women should be on boards, involved in decision making and [how] we should fund it. But where’s the money? No one’s actually putting capital where their words are.”

To help combat the problem, Visa Foundation will give $1 million in grants to AfriLabs, a community of technology hubs, innovators and entrepreneurs, and Graça Machel Trust, a women-founded and-led Pan African nonprofit.

AfriLabs will in turn use that money to fund its RevUp Women Initiative which supports early-stage, female-led startups, the release said.

Graça Machel Trust, meanwhile, will use its share of the funding to expand its enterprise development program “Women Creating Wealth” in Uganda, Kenya, and South Africa to reach 100 women-led SMBS.

Visa announced last year that it would invest $1 billion in Africa to boost the continent’s digital transformation, with plans to scale operations, introduce new technologies and deepen partnerships with merchants, governments, financial institutions (FIs), FinTechs and mobile network operators in the next few years.

“The inclusion of mobile network operators reflects the different role Visa plays in Africa’s payment ecosystem compared to the United States,” PYMNTS wrote at the time.

In addition to serving as a partner to banks that issue credit and debit cards, Visa’s African operations will need to work with the continent’s mobile money and alternative payment FinTechs, “which use solutions including mobile wallets and virtual cards to bring digital payments to unbanked populations.”