The GSMA, a global telecom industry body, has released a report offering actionable recommendations to address funding challenges faced by female-led startups in low- and middle-income countries (LMICs).
Titled “Funding Female Inclusive Startups in LMICs: Recommendations for Investors, Donors, and Funders”, the report highlights systemic barriers hindering women entrepreneurs, including limited funding access, wage discrimination, and restrictive social norms.
GSMA noted that only 11% of tech startups in Africa are led by women, and they are primarily concentrated in less-funded sectors like health and education technology. A Disrupt Africa report revealed that 55% of African female founders identified access to funding as their biggest obstacle.
The report also highlighted a stark funding gap, with female-led startups securing only 65% of the funding their male counterparts receive. This disparity worsens at later investment stages, where gender biases are more pronounced. A World Economic Forum report further revealed that 80% of women entrepreneurs in LMICs are unserved or underserved by financial institutions due to high collateral requirements and elevated interest rates.
To close these gaps, GSMA outlined six key strategies. First, it recommended reevaluating outreach channels to connect with female entrepreneurs in underserved regions. Effective outreach, GSMA noted, requires leveraging partnerships with women’s associations and community networks while accounting for language, geographic, and cultural nuances.
The second strategy focuses on highlighting role models to inspire female entrepreneurs and challenge stereotypes in male-dominated sectors like agriculture and technology. Profiling successful women-led startups can encourage applications and reassure investors of their viability.
GSMA also emphasized the need for tailoring regional approaches to address location-specific challenges. It cited Latin America’s high female entrepreneurship rates and Africa’s retail-focused ventures as examples, calling for region-sensitive venture-building programs instead of one-size-fits-all funding models.
The report urged funders to prioritize female leadership and offer support during application processes, such as guidance on proposal development. While avoiding rigid quotas, GSMA encouraged creating ecosystems that allow gender diversity to grow organically.
Other recommendations include developing gender action plans to ensure diversity across all businesses in a funding portfolio and addressing internal biases among funders. GSMA emphasized the importance of training programs to counter implicit biases in pitch evaluations and risk assessments.
The report concluded that addressing gender disparities in funding is essential for driving economic growth, fostering innovation, and creating inclusive entrepreneurial ecosystems in LMICs.
