Rise in Female Leadership Among German SMEs in 2025, Despite Overall Decline in Management Positions

In 2025, women led 16% of Germany's small and medium-sized enterprises (SMEs), equating to 621,000 companies—an increase from a record low of 14.3% in 2024, according to KfW research. However, this growth contrasts with a drop in women's overall representation in management roles within SMEs, which fell from 35.6% to 34.3% over the same period.

Women predominantly helm small service sector businesses, with 88% of female-led firms operating in areas such as hospitality, retail, tourism, and personal services. The majority—84%—of these companies are micro-enterprises with fewer than five employees. Female-led SMEs collectively employ approximately 3.3 million people, representing 10% of the SME workforce, and generate about €435 billion in revenue, accounting for 8% of total SME revenues.

In contrast, male-led SMEs tend to be larger, with an average of 10 employees and 23% higher median revenue (€288,000) than female counterparts. Notably, women support one another in leadership: 76% of leadership roles in female-headed firms are held by women, compared to just 14% in male-led companies.

Dr. Dirk Schumacher, KfW's Chief Economist, emphasized that despite the rise in female leadership at the top level, women remain underrepresented overall in SME management. He underlined the importance of increasing women's employment to enhance leadership parity, expressing optimism that the female leadership quota in SMEs will gradually improve in coming years. These insights stem from the KfW SME Panel, reflecting a comprehensive survey of the German SME landscape.