Fewer women are creating their businesses in Mauritius. Here are 6 policies that can help reverse the trend.
To enable more women entrepreneurs to seize opportunities offered to them under the Women Protocol of the African Continental Free Trade Area (AfCFTA), the UNDP and member countries have sought to assess the preparedness of women-owned businesses who are or have the potential to be part of the regional value chain in Africa in 2021. In Mauritius, Lillka Cuttaree, gender policy, and entrepreneurship specialist, was appointed as National Consultant by the UNDP to report on the competitiveness and export-readiness of Mauritian women-owned businesses.
Despite the lack of disaggregated data on women in trade in Mauritius, Lillka Cuttaree was able to extract valuable data from public and private institutions that show that the number of women creating their businesses is declining rapidly, thus confirming the trend captured by the World Bank Gender Data Portal. She also found a marginal presence of both women-led and women-owned large and medium-sized companies in the export sector.
Lack of Gender Disaggregated Data Undermines Policy Response
The findings of the study took policy-makers by surprise. Although there was suspicion that most local businesswomen were engaged in domestic and non-scalable sectors, the lack of gender-disaggregated data made it impossible for policy-makers to understand and measure the size of the challenges ahead of women entrepreneurs. While Statistics Mauritius collected and produced data on women in education and employment, it did not include women in business and trade.
A Dwindling Number of Women in Business Registration
Data from the Companies and Business Registration Department showed that only 10% of the total number of businesses registered in 2020 were women-owned as compared to 16% in 2018. The World Bank Gender Data Portal showed that as from 2017, a sudden and unexplained drop could be observed. Indeed, the share of newly registered women-owned companies between 2014 and 2017 has remained stable at 33% per annum.
“Only 10% of the total number of businesses registered in 2020 were women-owned compared to 16% in 2018”
Another interesting finding, despite the lack of disaggregated data on the topic, was that only 2.5% of large and medium-sized export-oriented companies were women-owned. Data from sources such as the Economic Development Board and the Mauritius Export Association (MEXA) showed that few manufacturing companies were women-led and women-owned. According to the MEXA, only 3 out of a total of 125 members were either led or owned by women.
The study also revealed the vulnerability of small domestic-oriented women-owned companies. Of the 4112 registered small businesses registered at the SME Unit in 2020, 47% were women-owned, accounting for a total annual turnover of Rs. 1.3 billion, i.e., 77% less than their male counterparts.
However, the study also outlined the resilience and grit of the small Mauritian women-owned export-oriented entities. The study indicates that they outperformed their male counterparts. Figures provided by the SME Unit show that while only 36% of the export-oriented companies were women-owned in 2020, they made 42% of the total annual turnover.
On average, small women-owned export-oriented companies were making Rs. 3.2 million per year as compared to Rs. 2.5 million per year for male-owned companies. The best performing women-owned MSMEs were operating in information technology and jewelry mainly, both sectors accounting for 50% of the total annual turnover made by export-oriented women-owned small business entities in 2020. The textile sector, although a traditional sector, continued to attract women entrepreneurs. The majority of the women-owned companies registered with the SME Unit were operating in the textile sector but exporting as far as France and South Africa.
Access to Finance Remains a Major Challenge
Access to finance was identified as a major problem by women entrepreneurs, who participated in the national consultations. Over 81% of the respondents, who participated in the survey carried out during the course of the consultations, stated that they had recourse to personal funding at the inception stage. 60% reported that they encountered discrimination when applying for funds. Data from the Development Bank of Mauritius (DBM) itself showed that the sums disbursed under the Women Entrepreneur Scheme represented only 1% of the total amount disbursed between July 2020 and August 2021.
It is worth noting that the DBM remains, so far, a pioneer in special loans for women entrepreneurs and is working in close collaboration with other institutions to remediate existing weaknesses in statutory requirements such as spousal guarantee. The lack of interest of women entrepreneurs in special schemes could also be observed. The Women Entrepreneur Loan Scheme of the DBM attracted only 3% of women applicants. A low average loan amount disbursed (Rs. 271,186) may be another reason why women shy away from targeted financial support.
6 policies to reduce gender disparity in business
Here are 6 recommendations made in the report:
- Improve the availability of national gender-disaggregated data.
Gender disaggregated data is critical for gender policymaking. There is urgency for the government to strengthen the collection of gender data in business and trade.
- Facilitate access to information and trade opportunities.
The national consultations with women entrepreneurs showed that the most successful entrepreneurs were those who had contacts in both private and public institutions and who fed them with information on trade opportunities. The government should improve on the fair distribution of information by setting up a dedicated trade desk in each AfCFTA member country, set-up a Business Facilitation and Innovation Center for Women, and build a digital Women Marketplace that can connect women manufacturers with suppliers of raw materials for example.
- Support inclusiveness through women incubators.
Women entrepreneurs must be given training on how to meet international quality standards in their areas of activities. They must be encouraged to apply for certification to improve their export readiness. Women incubators can play a key role in coordinating institutional efforts to support women-owned startups.
- Facilitate access to venture capital financing opportunities.
There are various barriers to capital at the inception stage that have been reported by women entrepreneurs, including their marital status. Public-private initiatives in advisory and finance must be explored to improve women entrepreneurs’ chances of raising capital.
- Provide support and facilitate participation in African public procurement exercises.
AfCFTA Business Facilitation and Innovation Centers must act as a coordinating body for trade-related information to help women respond to open bidding exercises in Africa.
- Build and promote a “Made in Africa” brand.
A “Made in Africa” brand will help all entrepreneurs but especially women place their products overseas and provide preferential access to regional supply chains in priority sectors such as creative industries, information technology, jewelry, and high-end apparel.
Talking to Le Matinal Media, Lillka Cuttaree stated the following: “For the time being, we are receiving mixed signals. Although we have noticed a fall in women’s participation in newly registered businesses, we also found many highly innovative women entrepreneurs who are exporting their products and services across the world. These women need to be in the center stage to inspire younger women.” She emphasized on the need for the government to improve gender data collection in trade and improve the capacity to assist women who want to do business overseas.
