Do women have equal access to finance for their business?
March 2017 - Women are less likely than men to report that they can access the financing needed to start a business in all countries except for the United States, Mexico, Greece and Indonesia, where men and women are equally likely to report to have access to finance (see figure below). This gender gap can be associated with women having lower levels of experience, operating in highly competitive and low-growth sectors, as well as gender-biased credit scoring and gender stereotyping in investment evaluations. Women are also often hindered by less access to basic financial services (e.g. checking and savings accounts).
Consequently, women entrepreneurs are more reliant on self-financing. Furthermore, self-employed women are more likely than self-employed men to be discouraged borrowers, i.e. people who do not apply for loans because they believe that the loans are not appropriate or that their application will not be successful.
Public policy can facilitate access to finance for women and address market failures, including information asymmetries and financing gaps. The most common approaches are to offer grants, loan guarantees and microfinance. There is also a growing trend in public policy to improve access to risk capital for women entrepreneurs with growth-oriented businesses. Approaches include attracting more women investors and advisors into venture capital and business angel networks and forming women-led networks to invest in women-owned enterprises. There are also a small number of initiatives that invest in women-led ventures in exchange for an equity stake.
- Entrepreneurship at a Glance 2016, OECD (2016), OECD Publishing, Paris