Challenges and Obstacles Facing Women Entrepreneurs: The Case of NigeriaEmerging Entrepreneurship in Africa: Individual Assignment

University of Edinburgh

By Sasiya Supprakit

Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

Challenges and Obstacles Facing Women Entrepreneurs: The Case of Nigeria

I. Introduction

Women entrepreneurs have become increasingly important as they make

influential impact in global economies and businesses today (NFWBO, 1998; Woldie

and Adersua, 2004). A growing number of women entrepreneurs rapidly continues in

developing countries including Nigeria (OECD, 1998; Woldie and Adersua, 2004).

Regardless of their impacts and contributions, women generally have obstacles in

being entrepreneurs since it is a non-traditional occupation for women. Similar to

other countries in Africa, Nigeria, a western-African country with a fast-growing

business opportunity, is still considered to be a traditional society where it believes

that women should not take a major role in business activities (Zakaria, 2001; Mordi,

Simpson, and Singh, 2010). Given that there are already certain difficulties in

performing entrepreneurial activities in Nigeria, women entrepreneurs face even

greater challenges due to cultural and traditional beliefs. With such constraints, this

paper has an objective to explore major challenges that women entrepreneurs face in

Nigeria.

This paper is organised as follows. The first section identifies the concept of

entrepreneurs and women entrepreneurs. The second section gives background

information of women entrepreneurs in Nigeria. The third section focuses on three

major challenges faced by Nigerian women entrepreneurs. The next section presents

limitations in this paper. Finally, conclusion summarises the problems and suggests

solutions for women entrepreneurs in Nigeria.

II. The Concept of Entrepreneur and Women Entrepreneurs

Although entrepreneur has multiple definitions in different researches and studies,

it can be identified as “one who undertakes a commercial enterprise and who is an

organisational creator and innovator (Gartner, 1990; Gartner et al., 2004; Mordi,

Simpson, and Singh, 2010); one who prospects for or exploits opportunities and who

has a tenacity to face challenges” (Winn, 2005; Mordi, Simpson, and Singh, 2010:7).

Entrepreneurs commonly involve creativity and innovation, including the ability to

see opportunities when other people cannot see them. Entrepreneurs are committed in

entrepreneurship, which is the process of starting a new business venture (Rosa,

2011).

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Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

Women entrepreneurs are merely entrepreneurs who are females. According to

Okafor and Mordi (2010: 44), “women entrepreneurs are simply women that

participate in total entrepreneurial activities, who take the risks involved in combining

resources together in a unique way so as to take advantage of the opportunity

identified in their immediate environment through production of goods and services.”

Unique characteristics of women entrepreneurs include adaptability, innovativeness,

creativity, strength, accountability, managerial skills, and credit risk. Women

entrepreneurs fight against ‘glass ceiling’ as they desire for independence and

freedom for their career (Okafor and Mordi, 2010). The main differences between

male entrepreneurs and female entrepreneurs are the problems that they face in

participating in entrepreneurial activities. While women entrepreneurs face common

economical and business environmental issues that male entrepreneurs experience,

they also have to deal with issues such as inequality and sexism. Under such

circumstances, these can prevent women entrepreneurs to maximize their productivity

and hinder their business opportunities.

III. Women Entrepreneurships in Nigeria

There is a rising number of entrepreneurs in Nigeria. Opportunities are rising in

different sectors including agriculture, textile, transportation, and information and

technology (Martin, 2010). According to a study, “The Role of Cultural Values in

Understanding the Challenges Faced by Female Entrepreneurs in Nigeria,” it presents

that there is a positive correlation between increased gross domestic product [GDP]

and entrepreneurial activity (McClelland et al., 2005; Mordi, Simpson, and Singh,

2010). Since the CIA the World Fact Book reports that Nigeria has a high GDP

growth from 2007 to 2010, entrepreneurial activities also increases (CIA- The World

Fact Book, 2011).

Women entrepreneurs also contribute to the high economic growth, as Nigerian

women owned about 25-30 percent of registered businesses (Halkias et al., 2011). The

industrial sector in Nigeria has come to be dominated by small-scale enterprises,

which constitute 66 percent of all industrial establishments (UNIDO, 2001), and the

majority of this sector is female entrepreneurs (Aderemi et al., 2008; Mordi, Simpson,

and Singh, 2010). Even though women constitute more than 50 percent of the

population in Nigeria (Okafor and Mordi, 2010), the important roles that female

entrepreneurs play in the Nigerian economy has not been fully realised because they

are still largely hidden within the informal sector (Aderemi et al., 2008; Mordi,

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Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

Simpson, and Singh, 2010). Informal sector is characterised “as consisting of units

engaged in the production of goods or services with the primary objective of

generating employment and incomes to the persons concerned. These units typically

operate at a low level of organization, with little or no division between labour and

capital as factors of production” (UNECA, 2008:1). Struggling in unequal opportunity

and traditional society, women are still yet being exploited. The book Structural

Adjustment and African Women Farmers suggests the problem of women exploitation

as it mentions, “since national development plan do not consider women’s problems

as deserving serious commitment in terms of allocating scare resources to them, this

trend has resulted in women’s continuous exploitation in their struggle to cater to their

families and themselves.” (Gladwin, 1991: 129).

Despite their hardships, Nigerian women start their own businesses because they

need to raise income for their families as it states, “(w)hile women in Nigeria are

generally considered to be at the bottom of the poverty ladder (Iheduru, 2002), they

were engaged in the country’s commercial activities in the pre-colonial era for various

reasons, one of which was to supplement their family’s income” (Akinwumi, 2000;

Halkias et al., 2011). Other reasons that women entrepreneurs emerged because of the

high unemployment rate, 4.9% in 2007(CIA- The World Fact Book, 2011) and

informal discrimination, according to Remi-Alarape et al. (2009), “As a developing

country where women are often under-utilized, self-employment is sought as a means

to alleviate poverty, unemployment and gender based occupational segregation”

(Mordi, Simpson, and Singh, 2010: 6). This trend of Nigerian women engaging in

entrepreneurial activity still seems to be growing in the future as women seek

independence and career growth.

IV. Challenges Faced by Women entrepreneurs in Nigeria

In spite of their contribution to the economic growth, women still face numerous

challenges in being entrepreneurs in Nigeria. The major challenges are explored in

different academic papers, which can be divided into three main categories: cultural

boundaries, lack of access to finance, and inferior educational background.

Cultural boundaries

Cultural beliefs and traditions still remain as obstacles for women in being

entrepreneurs in Nigeria. As in many African countries, Nigeria holds conservative

values and traditional customs in doing business activities. Entrepreneurial activity or

business is recognised to be an occupation for men, whereas women should stay home

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Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

and be housewives; “…gender expectations that women should be humble and

modest and, through the priority given their roles as wives and mothers, that they

should take lesser role in business or incoming activities” (Zakaria, 2001; Mordi,

Simpson, and Singh, 2010:6). Nigeria is also a patriarchal society as it is mentioned,

“the asymmetry and ascendancy of males over females in the labour market are

clearly seen in patriarchal communities, where as in Nigeria there is a large power

distance and high masculinity” (Hoftede, 1980; Mordi, Simpson, and Singh, 2010:9).

Such cultural beliefs create barriers for Nigerian women entrepreneurs. According

to Ayogu (1990), “…women are groaning under unjust culture, beliefs and

overbearing influence of a male dominated society especially in Nigeria where

women are denied access to property and land ownership” (Okafor and Amalu,

2010:67). Stereotypes in women and traditions create fewer opportunities for them to

grow in their career and entrepreneurship; “Even when Nigerian women gain access

to a managerial career like their male counterparts, they face additional problems

(Obbe, 1980). In Nigerian culture, the traditional female role is still highly regarded,

and such qualities as subservience, supportive, and submissiveness meet with

approval” (Woldie and Adersua, 2004:80).

In addition to the aforementioned issues, women also hold a lot of family

responsibilities. Since they are believed to be the ones who take care of children, it

gives them a great challenge in becoming entrepreneurs and at the same time

performing women tasks. According to one of the women entrepreneurs in Lagos, she

says, “As a married women I cannot spend a lot of time with my children because of

my business, it is hard; men in Nigeria do not often help out with the kids” (Woldie

and Adersua, 2004:86).

Lack of access to finance

Another major challenge that women entrepreneurs experience is the lack of

access to finance. It is statistically shown that women, constituting half of the

Nigerian population, “have remained in the bottom 30 percent of the poorest citizens”

(Woldie and Adersua, 2004:84). Because of poverty, women often do not have capital

required to start their businesses. According to the report Framework for a Strategy to

Support Women Entrepreneurs in Nigeria, “women typically do not possess the kind

of tangible assets banks require in order to lend money” (cited in Halkias et al., 2011:

225). Even though Nigerian women approximately own 25-30 percent of registered

businesses, only 10-15 percent have access to bank credits (Halkias et al., 2011).

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Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

In addition to lack of tangible assets, women also face sexism and gender

discrimination in attempting to acquire loans and credits. Mordi (2010), Simpson

(2010) and Singh (2010:9) state, “In terms of finance, banks in Nigeria have been

found to operate a binary loan and credit grant process which raise barriers for women

in terms of granting loans, partly because they are less likely to have the necessary

collateral or important family ties (Hisrich and Ozturk, 1999; McElwee and Al-

Riyami, 2003; O’Neil and Viljoen, 2001) and partly due to gender stereotypes that

favour men” (Kinbanja and Munene, 2009). Microfinance banks are the current

source for entrepreneurship in Nigeria. However, women still face difficulties due to

lack of proper business plans, “In an ongoing research conducted recently, it was

discovered that male to female application and approval by MFB are in the ratio 65%

to 35%” (Nigerian Woman, 2010).

Inferior educational background

Africa is known for its poor and unequal opportunities for education. This is also

not a surprising case for women in Nigeria. Lack of educational background is also

another barrier for women entrepreneurs. Halkias (2011), Nwajiuba (2011),

Karkiolakis (2011), and Caracatsanis (2011:222) state, “Providing the majority of

Africa’s labor, women’s productivity is hindered by widespread inequality in

education as well as unequal access to land and productive inputs.” Men tend to

receive more education and training than women. Therefore, they have more

knowledge in operating businesses and entrepreneurial activities in Nigerian

competitive market. This argument is presented in this statement, “women

entrepreneurs in Nigeria are often prevented from running competitive businesses by

their relatively low education and skill levels, which generally limit their access to the

various support services” (Woldie and Adersua, 2004:79). A Nigerian women

entrepreneur also expresses from her experience, “As women, we receive less

education and training than men, this puts us in a disadvantaged position” (Woldie

and Adersua, 2004:86). Inferior educational background to men is another crucial

obstacle that prevents women to become successful entrepreneurs.

V. Limitations

Since there are still few academic research papers and studies focusing on

women entrepreneurs in Nigeria, this paper also has its limitations. This paper mainly

selected the three major challenges that Nigerian women entrepreneurial commonly

experience according to the research. However, there are still some other challenges

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Individual Assignment: s1062196Emerging Entrepreneurship in Africa: Opportunities and Obstacles

that should be explored in greater length and details including poverty, sexual

harassment, access to technology, lack of opportunities for expansion, informal

discrimination and etc. (Woldie and Adersua, 2004). With 2,000-word limit, it is not

possible to further dealt with these issues. The future research can possibly study

opportunities and other aforementioned challenges that both Nigerian women and

men entrepreneurs have. In addition, it can also study in depth on successful

entrepreneurial experiences of Nigerian women entrepreneurs and how they overcome

their obstacles. This will certainly be beneficial to both academic research and

entrepreneurial practice.

VI. Conclusion

In conclusion, women in Nigeria still have a trend to continuously become

entrepreneurs regardless of the major challenges they face: cultural boundaries, lack

of access to finance and inferior educational background. It is also foreseeable that

women are changing their traditional roles as “Most women are now operating as de-

facto heads of households in settings and a number of these women are involved in

entrepreneurship and business management in order to provide income for their

family/home keeping” (Okafor and Mordi, 2010: 44). As women create greater

impact in the economic performance, organizations are created to support women

entrepreneurs such as The Country Women Association of Nigeria (COWAN), which

has the purpose to promote welfare of poor women in agricultural and economic

decision making (Halkias et al., 2011). There should be more support and services to

assist women in overcoming the business challenges. These services should include

access to know-how, credit, and entrepreneurship education and training. With

assistance, women can enhance their potential to create economic impact and create

job opportunities; they can become the key to solve poverty in Nigeria in the future

(Halkias et al., 2011).

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