The Impact of Financial Inclusion on Women Entrepreneurship in South Africa

Over the past decade, financial inclusion has gained recognition as one of the main pillars of the developmental goals in South Africa and has been identified as central to sustainable transformation and development of society. Despite this recognition, lack of finance and affordable credit remains one of the biggest hindrances in starting and growing a business in the country. These challenges are exacerbated when it comes to South African women entrepreneurs. Even though women represent more than half of the population, their participation in business is less than 30%. In South Africa, specifically, women entrepreneurs continue to have limited access to finance, which ultimately restricts the growth of their businesses, and they remain largely financially excluded and more specifically, excluded from affordable credit. The purpose of the study was to determine the impact of financial inclusion on women’s entrepreneurship and, the extent to which the disparity in women’s entrepreneurship can be explained by financial inclusion in South Africa. Through a conceptual framework and in-depth review of literature, we observed that entrepreneurship is positively influenced by financial inclusion, and since women represent more than half the population in South Africa, it is necessary to promote their participation in business. The study further observed that the South African government has made significant progress through various programmes, but this did not always translate into increased participation by women in business. Finally, the study observed that despite the various initiatives that have since been established, there will be no proper direction and measurement of the progress until the country adopts an explicit financial inclusion strategy.