The Middle East and North Africa (Mena) region has made strides towards maturity and development of its startup ecosystem, however, gender inequality prevails.

The Global Entrepreneurship Monitor (GEM) Women Entrepreneurship Report 2018/2019 states that the largest gender gap in established business ownership is found in Mena at over 40 per cent.

The number of women entrepreneurs is still significantly lower than the number of male entrepreneurs in many contexts. The recent State of Pre-seed Startups in Mena report by Wamda showed that women founders represent a mere 25 per cent of pre-seed startups in the region, and the latest State of Digital Investment report by Arabnet and Dubai SME found that investments in teams with at least one female founder made up about a quarter of all deals in 2018.

The Organisation for Economic Co-operation and Development (OECD) said Mena is losing an estimated $575 billion a year due to the legal and social barriers that exist around women’s access to jobs and careers.

While economic progress and development are significantly important to female empowerment and higher rates of entrepreneurship in general, a culture of gender inequality still dominates the macro context of the regional startup ecosystem, leading to limited entrepreneurial behaviour by both men and women.

Inequalities that have long affected women in the business and entrepreneurship sector range from cultural norms to insufficient support offered to women-led ventures, lack of policy frameworks that address the gender gap and the challenge of balancing family responsibilities with their work among others.

Better Intentions

Yet despite the gender gap, there are signs that women are becoming more confident to start their own businesses.  The GEM Women Entrepreneurship Report 2018/2019 states that the highest rates of women’s entrepreneurial intentions were reported in Mena at 36.6 per cent, referring to a clear trend of younger women founding companies in countries like UAE, Saudi Arabia and Qatar. In addition, the region shows the largest increases in women’s necessity motives for entrepreneurship at 35 per cent.

More noticeably, Mena female entrepreneurs are outpacing other nations on many fronts. An impressive 91.5 per cent of young women in the region are educated, according to Global Female Leaders.

Analysis shows that if women and men participated equally as entrepreneurs, global gross domestic product (GDP) could rise by approximately 3 – 6 per cent, boosting the global economy by $2.5 trillion to $5 trillion.

“Women participation is macro critical. It is how you move from thinking about a minority that needs more representation into the economic gains to societies [as a result of] women participation,” said Rania Al-Mashat, Egyptian Minister of International Cooperation, while addressing The Global Women’s Forum 2020 recently held in Dubai.

It is crucial according to Al-Mashat, to quantify the impact women entrepreneurs have on GDP, employment rates, productivity and even wage increases to men - since pay for both men and women become higher as the society becomes more productive, in order to encourage governments to reshape current policy frameworks.

“Only by relying on the correct stories [can] you open the doors for more women to come in, and therefore the economic and societal gains become a reality, this is why we need to elevate the narrative,” she said.

Providing evidence of successful women business leaders and entrepreneurs can encourage others to pursue a role outside of the home.

Rana Nawas, an entrepreneur, keynote speaker and strategic advisor, created her podcast When Women Win to present strong female role models.

“Women in the corporate world don’t have enough role models at the top. I work to highlight ordinary women doing extraordinary things – giving men and women access to insights of women’s experience and expertise,” says Nawas. “We need to build a robust enough system that doesn’t rely on the character of a woman. There is a huge source of inequality, which is that men are appraised based on potential, while for women it depends on past performance.”

Even for those who do take the plunge and launch their own startup, they can face societal pressure to quit.

“Being an Emirati woman entrepreneur, there is the backlash of people saying why do you have to work, you have a family and a husband to look after you. There is a stereotype that people do not think you would work very hard,” says Fatma Almulla, founder of FMM, a fashion and lifestyle brand based in Dubai.

Investment Woes

Perhaps one of the biggest challenges facing women entrepreneurs, is access to finance. According to the latest Women Entrepreneurs Finance Initiative (We-Fi) report, women-led businesses are generally constrained in obtaining finance to grow and lack networks and links to high value markets and investors.

Yet studies around the world have shown that women make more revenue per dollar investment compared to men and are more likely than men to repay their loans.

“It is harder for women to get investment and part of that is due to the fact that it is much easier for a person to invest in someone they find to be like themselves, and there still aren’t that many women working in the VC industry,” says Katharine Budd, co-founder of Now Money.

A plethora of initiatives and programmes are attempting to address the issue. Most recently, the World Bank announced two new initiatives to improve access to startup financing and e-commerce markets for women entrepreneurs in the Middle East.

“Starting and growing a business is one of the most powerful tools for women to overcome poverty and build better lives for themselves, their families and their communities,” said David Malpass, president of the World Bank Group. “Removing regulatory barriers along with obstacles to access to finance and markets can give women-led businesses the opportunity to succeed.”

The Central Bank of Egypt launched an initiative for financial inclusion, in an aim to empower women and showcase the kind of impact they can have on the economy should they get adequate access to funding.

The UAE intends to extend maternity and paternity leave to encourage more women to stay at work after having children. Mona Al Marri, vice president of the UAE Gender Balance Council, said that policies to allow flexible working hours and part-time work are also being drawn up.

Several institutions are dedicated to empowering women in the region and equipping them to launch their ventures. For example, the Arab Women’s League, the Bahrain Businesswoman Society and the General Women’s Union in the UAE are few of the organisations that see active women participation. Such efforts are pivotal in enhancing women’s entrepreneurship skills through formal training and educational development.

A Different Mindset

However, some are opposed to such initiatives.

“There are a lot of advantages women enjoy [in Mena], the key is confidence. If you lack it no one will invest in your company,” says Mirna Sleiman, founder and chief executive officer (CEO) at FinTech Galaxy who believes that funding and demand for women entrepreneurs are available and accessible.

“Women need to capitalise on the opportunity the market offers and go after their purpose. The limits are in our minds, if we attract limiting thought we will have limited behaviour resulting in limited impact,” she says.

Amanda Perry, CEO of Vitality, highlights the role of education in instilling confidence and the entrepreneurial characteristics in women. “During education, women were told they couldn’t do it and certain subjects were off limits to girls. This creates limiting beliefs.”

Encouraging women to go into business and increasing the number of women entrepreneurs will ensure global economic gains, while directing the narrative in a conducive way to accelerate equality. 

“It is about diversity and inclusion. It is not women versus men, it is about balance which consequently contributes to a better-informed decision making,” says Amira Salah, chief marketing officer at Womena, an accelerator and investor targeting women-founded startups. “This is an untapped market with so much potential, yet it is very underserved despite being such a huge contributor to economic growth. The face of innovation and entrepreneurs globally is still male dominated, while women have to work doubly hard to get that exposure.”