Bridging the funding gap for women entrepreneurs in Nigeria

Women business owners in Nigeria must overcome unconscious bias and societal constraints

Originally published on Global Voices

In Nigeria, where women make up half the 237.5 million population, an estimated 23 million female entrepreneurs account for 41 percent of the nation’s micro-businesses. This places the West African nation among the countries with the highest female entrepreneurship rates globally. Women-owned businesses also contribute 37 percent to the nation’s GDP, highlighting women's critical role in driving Nigeria’s economic growth.

Despite the crucial and dynamic role women entrepreneurs play in driving economic growth throughout Sub-Saharan Africa, a World Bank analysis shows that women-owned businesses consistently perform worse than businesses owned by men due to gender-specific barriers.

Across the world, female entrepreneurs receive less funding than their male counterparts. Research indicates that women-led startups secured only 14.5 percent of global venture capital in 2021, leaving 85.5 percent to male-led teams. This disparity is even more pronounced in emerging markets, where women-led startups receive just 7 percent of venture capital. 

Challenges Nigerian women entrepreneurs face

A survey of 100,000 women in Nigeria by the Gates Foundation identified a lack of start-up capital or equipment as the primary factor preventing 62 percent of women from achieving their economic ambitions.

According to a report by Nigerian financial technology (fintech) company Moniepoint, only 16.7 percent of women manage to get access to loans from their financial institutions, despite credit data showing women having a 2.5 times lower loan default rate than men. The report highlighted issues such as unconscious bias, societal constraints and financial habits, and lack of awareness as major funding challenges women-owned businesses face.

Many Nigerian banks often demand land or property as security, but cultural norms like patrilineal inheritance mean women rarely own titled assets. Only 37 percent of women in sub-Saharan Africa have bank accounts, let alone property, limiting their loan eligibility. 

Women entrepreneurs, especially in rural areas, often lack formal business registration or financial records, which are key requirements for bank loans. A report by Businessday highlights that 98 percent of Nigerian women are excluded from formal credit markets, partly due to low financial education and complex application processes that favor men who’ve had more exposure to formal systems.

Why closing the investment gap matters

Funding women entrepreneurs in Nigeria on par with men is critical for several economic, social, and developmental reasons. Research from the Gates Foundation highlights that women invest earnings back into family health and education, creating a ripple effect that reduces multidimensional poverty. Funding women enhances their agency and decision-making power. It enables women to achieve financial independence, educate their children, and challenge patriarchal norms, benefiting communities broadly. Closing the USD 1.7 trillion financing gap for women could add up to USD 6 trillion to the global GDP.  

While the challenge of underinvestment in women-led businesses is a global issue, advocacy groups are working to improve their support for female entrepreneurs in Nigeria. 

Speaking in a webinar titled “Women’s Economic Empowerment” organized by Gatefield, Nigerian entrepreneur and advocate for women’s economic empowerment, Fifehan Osikanlu, noted that 

While access to financial and digital resources is essential, it is not enough — true empowerment requires financial literacy, digital skills, and policies that meet women where they are. We must move beyond inclusion to ownership, investment, and leadership, ensuring women not only participate in economies but also drive and shape them. This is about power, autonomy, and legacy — transforming families, communities, mindsets, and economies.

Although the Nigerian government has made strides through targeted funding, partnerships, and policy support to improve financial access for women entrepreneurs, scaling these efforts and addressing systemic barriers remain critical for maximizing their economic potential.

Written by Pamela Ephraim