The first step we can take to shift African Women’s mindset around money is to just start talking about it! African Women can have a remarkable economic impact on the world—let’s embrace what money can do and break the taboo.
Women have traditionally had a love-hate relationship with money. On the one hand, we love to spend it, but we hate to talk about it. Many women were brought up that it’s impolite or embarrassing to talk about money. In one study, 61% of women said they would rather discuss the details of their own death than money! Women also tend to have a more complicated relationship with money than men. For women, money represents not only purchasing power but also security and the ability to care for their families. This creates an emotional connection that can make money more frightening to deal with. Unfortunately, these attitudes around money are impacting the ability of female entrepreneurs to secure the funding they need to grow their businesses.
We’ve seen the statistics many times; women don't ask for raises as often as men. Linda Babcock, co-author of Women Don’t Ask, says men are four times more likely than women to ask for a raise—and when women do ask, they typically request 30% less than men do. This trend applies to female entrepreneurs as well. According to data from the Kauffman Foundation, 40% of new entrepreneurs are now women, and the number of new women-owned businesses is growing at double the rate of male-owned businesses. In spite of this incredible growth, women are not asking for the funding they need to grow their new ventures. A recent study published in Venture Capital showed that females are less likely to ask for outside funding than their male counterparts. This phenomenon is supported by a survey from SCORE with data collected from more than 20,000 small businesses showing that only 25% of women entrepreneurs seek financing over the lifespan of their business. Another study by Fundera revealed that female entrepreneurs who do seek funding ask for roughly $35,000 less than men do. So, how can we get women to ask for the funds they need to grow their businesses? It all starts with the right mindset.
The first step we can take to shift women’s mindset around money is to just start talking about it! Women don’t talk about money in our society nearly enough. It is critical to encourage conversations around money and finances between friends and family as well as in the press and schools. Education is also important. Mentors are a vital component to learning and business success. Research by Gallup shows that adults with access to a mentor are five times more likely to start a business than those who don’t have a mentor. Also, SCORE’s report shows that entrepreneurs who seek mentorship significantly increase their chances of success regardless of gender. As female entrepreneurs change their mindsets around money, they will be able to take advantage of the vast amount of financing options available to them.