In Egypt, women entrepreneurs face significant challenges in accessing funding and investment opportunities for their businesses. These challenges are rooted in various factors, including societal norms, cultural biases, and institutional barriers. Egypt ranks 134 out of 146 countries in the World Economic Forum’s 2023 Gender Gap Report, indicating a significant gender gap. Traditional gender roles often prioritize women’s domestic responsibilities over professional pursuits, limiting their ability to start or expand businesses.

Additionally, the underrepresentation of women in leadership roles within financial institutions and investment firms contributes to a lack of understanding and support for the unique needs of women entrepreneurs. Women only comprise 19.7% of board members in Egypt, according to data from AUC’s Women on Boards Monitoring Report 2022.

“The current investment landscape for women still needs a lot of time to grow. Nowadays, people say that they are investing in female-owned businesses because they are ‘supporting women,’ as if it is some minority group in need of support. This shows that investors still cannot look past gender and at the actual competence of women” founder and CEO of Entreprenelle, Rania Ayman, said.

It is worth noting that only 12% of the startup founders in Egypt and the Middle East and North Africa (MENA) are women. According to data from the World Economic Forum (WEF), startups founded by women in MENA received only 1.2% of funding in 2021 and about 2% in 2022. According to WEF, gender bias and a scarcity of female investors are thought to hamper venture capital investment in female-owned businesses.

“The overall investment landscape is faced with lower liquidity, which lowers opportunities available for women attracting capital. My general remark would be the fixation on venture capital, being the target capital to attract women founders, especially if they are not building global tech products that are asset-light. This is something we lack in general in the region,” Karima El-Hakim, Plug and Play Tech Center’s Country Director for Egypt, tells Business Today Egypt. Entrepreneurship and Networks Senior Advisor at USAID’s Business Egypt Program Nashwa Habib shares El-Hakim’s view on the matter.

“Macroeconomic factors play a role in the current investment landscape. In the past few years, Egypt has faced economic struggles, including high inflation and currency depreciation, which contributes to establishing a challenging investment environment in general regardless of gender,” she explains. Habib adds that Egypt still suffers a gender gap manifested in cultural barriers and limited access to finance for women regardless of any progress they made in the past years. Data from The Gender Gap in Startup Investment 2022 report show that 482 startups raised almost $2.4 billion in the first nine months of 2022. Out of this number, just 38 were founded by women, who raised only 2% of the total investment value.

 Another key characteristic of the current investment landscape in Egypt is that “the current ecosystem of angel investors and venture capital is still male-dominated, making it more challenging for female-led businesses to raise funding. This is a global challenge,” Tiye Angels Manager Christine Sedky, tells Business Today. “Tiye Angels is Egypt’s first angel investment network that supports more females to become investors and female founders to become investment-ready. They are actively investing and focused on funding female-led businesses,” Sedky added.

Opportunities for growth

The upside is that there are great opportunities for growth and development in the current investment landscape.

Private equity and venture capital firms with gender-balanced senior teams delivered between 10% and 20% higher returns than teams with a majority of male or female leaders, according to data published by the International Finance Cooperation (IFC) in a report by Arab Women’s Enterprise Fund (AWEF) called “Gender-Smart Investing in MENA: An Egyptian Perspective on Strengthening Investment Strategies to Empower Women.” The AWEF report also illustrated that gender-balanced fund managers, with women representation of at least 30% in senior investment roles, generate up to 20% higher returns than those that are not gender diverse.

“There has been an increasing number of female entrepreneurs and female-led startups in recent years, especially in tech and social impact. This is a growth opportunity for the investment landscape because both local and international investors are realizing the missed potential and financial returns of investing in women. A growing number of programs and funds choose to invest in women,” Sedky highlights.

The way forward

To address the challenges and promote gender-inclusive entrepreneurship in Egypt, a multifaceted approach is needed. Raising awareness about the benefits of supporting women entrepreneurs and challenging gender biases through educational initiatives and public campaigns can help change societal perceptions. Financial inclusion initiatives, such as microfinance programs and women-focused investment funds, can provide much-needed capital to female entrepreneurs.

This is in addition to providing women with specifically designed capacity-building programs and mentorship opportunities to deliver the skills and confidence needed to succeed in business. Policymakers, organizations, and individuals need to work together to create a more inclusive and equitable investment landscape for women and bridge the gender investment gap.

“The rhetoric that tries to prove that women need support and women can’t work is outdated. Right now, we already have a pipeline of capable women entrepreneurs. We are trying to shed light on these women in our events to make the ecosystem see women just like men. We need to stop using that rhetoric and help women fit in to show their competence and achievements,” Ayman adds.

According to S&P, investors are increasingly using gender as a measure of sustainability, demanding better representation of women on corporate boards and in executive ranks. S&P Global also found women “to be the most underutilized source of growth” that could send global market valuations soaring.

Engaging corporate entities and investors in supporting women-owned businesses through initiatives like gender lens investing and supplier diversity programs can further boost funding opportunities for women entrepreneurs.

“We keep the stigma alive by continuing to invest in the same theory and continuing to preach about inclusion for women as a favor to society. Investors and enablers have the opportunity to close this gap by promoting environmental, social, and governance (ESG) in every company they invest in and in every lecture or talk in which they participate. This could be a way to give impact businesses a nice trendy positioning that is more likely to attract women founders,” Plug and Play’s El-Hakim says.

Sedky of Tiye Angels concludes that “the investment landscape also needs expanding Access to Capital and an increased support via incubators and accelerators for women. To achieve long-term sustainability, there has to be investment in education and programs that provide solid business knowledge and access to networks of expertise.”