In a region historically dominated by male investors, women in the Middle East are challenging norms and making strides in the financial sector.

UBS’s 2023 Women and Investing report reveals that 62% of women aim to become more active investors, and they are strongly interested in sustainable investing (55%) and private markets (39%).

However, significant barriers remain. The UBS report highlights that education, environment, and cultural norms play crucial roles in setting women up for success or failure in the financial world.

RISE OF FEMALE INVESTORS

Farah el Nahlawi, Research Lead at MAGNiTT, points to the growing presence of female investors despite the fluctuating investment landscape in the region over the past five years. 

After reaching a peak of 525 investors in 2022, the number dropped in 2023 before bouncing back with a 32% year-on-year rise in the first half of 2024.

“In terms of the number of female investors, there has indeed been a significant increase, supported by broader initiatives to promote diversity in the investment landscape,” El Nahlawi said. “Factors contributing to this rise include resources aimed at equipping women with the tools needed to make informed investment decisions.”

She added that the venture capital (VC) ecosystem is gradually becoming more inclusive, pointing to data showing increasing opportunities for women as entrepreneurs and investment fund leaders. 

In 2021, women-led startups accounted for 10% of the MENA region’s non-mega funding and captured 15% of total deals that year.

“The average portfolio size of women investors in the MENA region has shown signs of growth, although specific data is limited. We know a noticeable increase in female investor participation has occurred in recent years, mirroring patterns in regions like Singapore and Malaysia.”

KEY CHALLENGES

Despite recent progress, women still represent a small portion of the investment landscape in the region. 

Women are significantly underrepresented among venture-backed entrepreneurs and venture capital (VC) investors. Companies founded exclusively by women receive less than 3% of all VC investments, while women make up less than 15% of decision-makers in the industry.

One of the most significant challenges they face is the perceived lack of financial literacy, which often undermines their confidence—a hurdle that is sometimes self-imposed.

Many women believe they need a business background to pursue investing, leaving them hesitant to ask questions, seek information, or engage with trustworthy advisors.

According to UBS, over half (54%) of women in the MENA region rate their understanding of investments as low, 38% consider their knowledge to be at a medium level, and only 7.5% feel they have a high level of expertise.

Additionally, 52% of women identified a lack of financial education as a barrier, while 56% pointed to a shortage of accessible investment opportunities.

Dina Adel, Head of Investor Relations & Business Development at 

Gateway Financials, notes that female investors frequently face restricted access to networks and funding opportunities. She cites Egypt as an example, where women entrepreneurs secure only a small portion of venture capital. 

Adel highlights that external factors play a significant role in undermining women’s confidence in their financial knowledge. She points out that societal expectations often exacerbate this issue, making women in the region feel less assured about their financial expertise.

“Common biases include assumptions that women are more risk-averse or lack financial acumen,” she says, adding that these biases extend beyond investors and impact female CEOs and founders. Despite having solid business models, female-led startups in the region often face more scrutiny than their male-led counterparts.

“This disparity is often rooted in traditional gender norms that question women’s decision-making capabilities in finance,” she says.

According to Wamda, investment in female-led startups has steadily declined in recent months. In August, they accounted for just 0.3% of total funding. In July, 93.8% of investments went to male founders, 5.8% to mixed-gender teams, and only 0.1% to female-led ventures.

In 2023, of the 583 startups that secured funding in the MENA region, only 52 were founded by women. These startups collectively raised $19 million, a staggering 63% drop from the $52 million raised in 2022.

Lucy Chow, Senior Senator to the UAE at the World Business Angels Investment Forum (WBAF) and Director of the Women’s Angel Investor Network (WAIN) says female investors frequently face doubts about their expertise and financial acumen. 

This skepticism makes it harder for them to access the investment networks integral to the investing ecosystem.

Despite these challenges, women have significant potential to succeed and surpass their male counterparts. The UBS report reveals that, on average, women generate 78 cents of revenue per dollar invested, compared to just 31 cents for men.

If men and women participated equally as entrepreneurs, global GDP could increase by 3–6%, adding $2.5–5 trillion to the global economy. Diversity, particularly gender diversity, directly contributes to economic growth.

SETTING UP FOR SUCCESS

Chow points out the scarcity of female role models and mentors in the investment industry, emphasizing the need for greater female representation. “There should be a conscious effort to include more women as speakers, moderators, and participants at industry events,” she says. 

She highlights venture capital firms that offer lower buy-ins for women to encourage their participation as limited partners. “This is so important. Similarly, existing angel networks may consider a lower minimum investment to allow women to feel comfortable ‘dipping their toe’ in the startup investing space.”

Chow also points to organizations like Female Angels 2022 as models for MENA whose mission is to diversify the early-stage investment landscape by actively targeting those interested in the region. They organize regular pitch nights and workshops to ensure women feel comfortable, informed, and included in the startup ecosystem.

Similarly, Adel emphasizes the need for more women in leadership and decision-making roles. She shares her efforts in making investment spaces more welcoming for women.  

“I navigate these biases by consistently demonstrating my expertise and actively seeking opportunities to mentor and support other women in the field, thus challenging these misconceptions,” Adel says.

She also points to government initiatives like Egypt’s She Leads program and the UAE’s Women’s Economic Empowerment Program.

These programs provide mentorship and leadership training for women, enhancing financial literacy and enabling them to make more informed investment decisions. Adel believes similar efforts should extend into the broader investment community and private sector.

Chow encourages women interested in investing to take proactive steps, such as building a solid investment track record and engaging in investor forums to establish their credibility. “Building a personal brand through social media, speaking at industry events, and blogging can help you position yourself as a knowledgeable and respected investor.”

Diving into angel investing can be intimidating for women without a solid foundation. To bridge knowledge gaps, Chow advises pursuing education in investment strategies, financial literacy, and market analysis through mentorship, investment clubs, and online courses.

Angel investing without a solid foundation can be daunting for women. 

Chow suggests pursuing education in investment strategies, financial literacy, and market analysis through mentorship, investment clubs, and online courses. These can all help bridge knowledge gaps. 

“Remember, do not feel pressure to invest in a company or sector that does not resonate with you. Do not give into pressure to conform to the prevailing investment trends or behaviors.”

“Finding your investment philosophy is crucial. Participating in female-led investor groups can provide the support needed to invest successfully and in areas that are authentic to you,” Chow adds.