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The African SME: Investing in women

The African SME story, powered by Support4AfricaSMEs and Business Day, shares stories of African SMEs thriving during the COVID-19 pandemic, to propagate hope for entrepreneurs across the continent.
In the latest episode, host Linda Ochugbua profiled Ifeoma Uddoh, founder and CEO of Shecluded, a start-up finance investment company to help fund female entrepreneurs with the goal to provide small loans to women-led business, and has expanded to include providing financial literacy services.

Ifeoma’s interest in investment began while working as a non-executive director at Sasware, where part of her role was to review start-ups that needed investments, and she noticed, to her surprise, that very few were headed by women. After carrying out research and realising that there were few spaces established to help women, she decided to take the risk to bring about solutions to the problems identified and began Shecluded to provide financial independence to women.

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Ifeoma notes that the first lesson she learnt from the investment sector is that men and women process things differently, and that when women talk about money, they can come across as unprepared. She emphasizes that this should not be used as a reason to ignore female entrepreneurs, because there is a historical context as African women did not see money as something to aspire to. There is however a mental shift taking place now – female entrepreneurs are discussing money in more meaningful ways, and must understand how to not just make money but to also grow money.

In the wake of the COVID-19 pandemic, she believes finance is a major problem for small businesses, because struggling to survive as an SME can hinder creativity and business growth. The pandemic has also generated the need for a new set of skills, i.e. soft skills, necessary to adapt to the changing work environment. She acknowledges that few policies have been put in place to help entrepreneurs through the crisis, but notes that most decision makers and politicians are not entrepreneurs and so are not making enough favourable policies.

Many Nigerian entrepreneurs are looking to earn quick money, and Ifeoma notes that if this is the goal, a potential entrepreneur must seriously consider if an investment business is the best avenue, as it is capital-intensive and requires a license from Central Bank of Nigeria, especially as the business expands.

Shecluded is an inclusive brand trying to include a demography that the financial sector typically has had problems with, and is also looking to expand across Africa by building strategic partnership to make this easier.
The brand initially thought funding was the main barrier to business growth, but realised that many businesses were wary of receiving loans, and wasted time and opportunities to expand by not acquiring loans.

Shecluded aims to change entrepreneurs’ ideas about using loan services through financial literacy, because as Ifeoma notes “doing nothing has an interest rate” and “the problem is not a loan, but what you do with a loan”. Businesses must plan what loans will be used for before receiving them, know how the funds will impact their bottom-line, and ensure that it is not below the loan interest amount, to avoid being unable to pay back loans. She notes that there is a need for a mental shift, and for entrepreneurs to upskill from applying personal finances principles to businesses.

On the role of the government to grow investment businesses like Shecluded, Ifeoma cites relaxed policies that are friendly to inclusive brands in terms of taxation and tiered licensing to increase accessibility. She notes that long-term policies to build viable structures are not common in Nigeria, and plans often change every four or eight years, with changes in leadership, preventing sustainability within many sectors and affecting financial inclusion policies.

Her recommendations for governments and policy makers regarding women in business is to examine why, despite Africa having the highest number of women-led SMEs, these SMEs stay small, and to channel their efforts into growing these businesses.
Ifeoma’s words of advice to African entrepreneurs: be purpose-driven, think big and position their businesses to be big, be value-driven because it pays off in the long run, avoid procrastination, be open to improvement by moving into in spaces where they can learn from bigger enterprises, and give employees opportunities to be innovative and give suggestions and advice.

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