Women Entrepreneurial Financing and Business Sustainability

Abstract

This study examines women entrepreneurs’ financing and business sustainability in Southwest Nigeria, with particular emphasis on the complementary roles of formal and informal financing mechanisms. A survey research design was employed, drawing on primary data from 874 women entrepreneurs selected through purposive and stratified random sampling techniques. Data were analysed using descriptive statistics (percentages, means, and averages) and multiple regression for inferential analysis. The results reveal that both formal financing (β = 0.528, p < 0.001) and informal financing (β = 0.691, p = 0.003) significantly enhance business sustainability, with informal financing exerting a stronger influence. This underscores the continued importance of indigenous, trust-based systems such as ajo, esusu, and cooperatives in bridging gaps created by limited access to formal credit, particularly for micro- and small-scale women-owned enterprises. The findings corroborate Schumpeter’s Theory of Economic Development by confirming that access to finance drives entrepreneurial innovation and growth, while also aligning with Gender and Development (GAD) Theory, which highlights the transformative potential of women’s financial inclusion. The study demonstrates strong linkages with the Sustainable Development Goals (SDGs), notably SDG 1 (No Poverty), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities). Policy implications suggest the integration of informal financing structures into national financial inclusion frameworks, the development of gender-sensitive financial products by formal institutions, and the promotion of hybrid financing ecosystems that leverage both institutional credit and community-based financial systems. The study recommends capacity building, digital financial inclusion, and gender-lens investing as critical strategies to enhance women’s access to finance and sustain their enterprises in Southwest, Nigeria.