Bridging the Finance Gap for Women Entrepreneurs

29. Slovenia: Policy insights on start-up competitions

Associate Professor Katja Crnogaj
Faculty of Economics and Business, University of Maribor

Professor Karin Širec
Faculty of Economics and Business, University of Maribor

Background

The Slovenian Government has demonstrated a strong commitment to gender equality and support for women entrepreneurs through various policies and initiatives. A key strategic document is the Resolution on the National Programme for Equal Opportunities for Women and Men until 2030 (ReNPEMŽM30) prepared by the Ministry of Labour, Family, Social Affairs and Equal Opportunities. This document, which follows the previous ReNPEMZM15-2 from 2015, outlines the goals, measures and key policy makers committed to achieving equal opportunities for women and men across various aspects of life in Slovenia by 2030. On September 22, 2023, the National Assembly unanimously adopted the resolution. Over the decades, Slovenia has built a robust network of public childcare and educational facilities along with other public services, which have empowered women to participate more equally in the labour market (Ministry of Labour, 2023[1]). Despite this progress, women in Slovenia still enjoy less economic, social and political power compared to men. According to the European Institute for Gender Equality, their position is even deteriorating in some respects (EIGE, 2023[2]). The new resolution, developed in co-operation with experts and civil society, addresses all areas where women are disadvantaged, aiming to create a more equitable environment.

Recent trends in women’s entrepreneurship

In Slovenia, as in many other countries, men are more frequently engaged in entrepreneurial activities than women. This gender disparity in entrepreneurship is attributed to various economic, sociological and psychological factors, including socio-cultural patterns influencing gender roles, access to resources such as capital and networks, and differences in risk perception and self-confidence (Minniti and Nardone, 2007[3]; Elam et al., 2019[4]). Data from the Global Entrepreneurship Monitor Slovenia (GEM Slovenia, 2024[5]) reveals trends in the share of early-stage women entrepreneurs among all entrepreneurs in Slovenia over the last five years. In 2021, the share of women entrepreneurs among all entrepreneurs in Slovenia increased significantly to 44%, exceeding both the GEM and the European GEM average. However, in 2022 and 2023, this figure fell to 34%, which was below the average values of the reference groups. This fluctuation can be partly attributed to market changes due to the COVID-19 pandemic, which had a temporary impact on entrepreneurial opportunities. The increased entrepreneurial activity among women in 2021 could be related to new opportunities or adaptations of existing business models during the pandemic. However, the decrease in 2022 and 2023 suggests a return to pre-pandemic levels, indicating persistent structural challenges. In Slovenia, there are 5.5 women entrepreneurs for every 10 men entrepreneurs, compared to the European average of 7 women entrepreneurs per 10 women entrepreneurs (Hill et al., 2024[6]). Men continue to dominate entrepreneurial activities, especially in high-growth sectors such as technology and engineering, while women are more active in sectors such as education, healthcare and social services, which are traditionally less visible in entrepreneurial metrics. Structural barriers, including limited access to capital, networks and resources as well as societal expectations and stereotypes, significantly impact women's entrepreneurial activities.

Barriers to financial access

Despite entrepreneurial support initiatives, women entrepreneurs in Slovenia face significant barriers in accessing financial resources. National experts associated with the Global Entrepreneurship Monitor (GEM) research share this view, highlighting the challenges in access to financial resources for women entrepreneurs in Slovenia despite high levels of social support. Women in Slovenia encounter difficulties in obtaining both start-up and growth financing. National experts report that women are less likely than men to obtain loans, grants and equity investments even when controlling for differences in demand. When they do secure funding, they often receive smaller amounts, face higher interest rates, and are required to provide more collateral (GEM Slovenia, 2024[5]).

Banks are gradually becoming more aware of the specific challenges that women entrepreneurs face in accessing financial resources. Information about these challenges is published on their websites (see (Nova Ljubljanska Banka d.d., 2020[7])). Banks also offer their customers access to expert banking and financial advice, addressing issues and specific challenges faced by women entrepreneurs. This increased awareness in the banking sector complements the efforts of the Public Fund of the Republic of Slovenia for Entrepreneurship (Slovene Enterprise Fund - SEF), which is the leading national financial fund dedicated to supporting small- and medium-sized enterprises (SMEs), start-ups and scale-ups. SEF offers a variety of financial instruments tailored to different stages of business development. However, SEF does not currently offer incentives exclusively for women entrepreneurs.

Policy issue: Competition for financial incentives for women entrepreneurs

The public call “Competition for Financial Incentives for the Best Business Model and Presentation by Women Entrepreneurs” is an initiative by SPIRIT Slovenia aimed at supporting women entrepreneurs, especially those in the early stages of their ventures. SPIRIT Slovenia is the Public Agency established by the Government of the Republic of Slovenia to promote entrepreneurship, technological development, internationalisation of Slovenian companies, and attract foreign investments. The agency operates under the Ministry of the Economy, Tourism and Sport. This public call, launched in 2019 in co-operation with the Ministry of Labour, Family, Social Affairs and Equal Opportunities, recognises and rewards innovative business models developed by women, thus promoting women’s entrepreneurship and enhancing their entrepreneurship skills. The competition takes place annually and encourages the creation and successful launch of new businesses by women entrepreneurs.

For the 2024 edition, the public call aims to select the best 100 business models presented by women who register their companies in 2023 and 2024. Eligible applicants are women who have established their businesses between January 1, 2023, and the competition application deadline. The companies must be at least 51% owned by women. Additionally, applicants must have completed the “ABC of Entrepreneurship” online training course offered by the SPOT counselling points and be among the top 100 in the presentation of their business models. The competition provides a total fund of EUR 300 000, with individual grants of EUR 3 000 for the best business models. These financial incentives are intended to support the business development and growth of the selected women entrepreneurs. This initiative is part of SPIRIT Slovenia's broader efforts to foster a supportive environment for women entrepreneurs (SPIRIT Women portal, 2024[8]).

The use of competitions, such as this one, has several advantages and potential drawbacks compared to other mechanisms for disbursing funds. On the positive side, competitions can highlight successful business models, creating role models for other aspiring women entrepreneurs. This visibility can inspire more women to pursue entrepreneurial ventures and provide concrete examples of success. Moreover, the competitive element can drive participants to refine their business plans and presentations, ultimately leading to more robust and viable business models. However, there are also potential downsides to using competitions. Not all participants will win, and this could negatively impact the self-esteem and motivation of those who do not receive funding. There is also a risk that the competitive nature of the process might discourage collaboration among participants. Furthermore, competitions may favour those with better presentation skills or existing resources, potentially overlooking innovative ideas from less polished but equally deserving candidates. A significant drawback of such competitions is that the amounts awarded are relatively low and primarily intended for early-stage entrepreneurial activities. There is a lack of initiatives aimed at later-stage support and the development of innovative ideas, which are crucial for sustained growth and long-term success.

Conclusions

The landscape of women entrepreneurship in Slovenia is characterised by both progress and persistent challenges, particularly in financing. Despite the Slovenian Government's efforts to promote women’s entrepreneurship through various policies and initiatives, significant disparities remain in access to financial resources. Women entrepreneurs often face greater difficulties than men. The “Competition for Financial Incentives for the Best Business Model and Presentation by Women Entrepreneurs” was a positive step toward addressing these challenges. This initiative, along with tailored support programmes, helps women overcome significant barriers such as access to capital and business networks. Analyses indicate that 80% of women entrepreneurs financed through such initiatives survive for at least two years, demonstrating the effectiveness of these support mechanisms. However, women entrepreneurs continue to face challenges in entrepreneurship, particularly in high-growth sectors like technology and engineering, while women are more active in sectors such as education, healthcare and social services. Structural barriers, including limited access to capital, networks and resources as well as societal expectations and stereotypes, significantly impact women's entrepreneurial activities. Potential policy development directions include increasing funding initiatives, promoting microfinance and fintech solutions and enhancing support services and financial literacy programmes.

References

[2] EIGE (2023), Evidence to Action: Gender equality and gender mainstreaming in the COVID-19 recovery, Publications Office of the European Union, https://eige.europa.eu/publications-resources/publications/evidence-action-gender-equality-and-gender-mainstreaming-covid-19-recovery?language_content_entity=en (accessed on 1 October 2024).

[4] Elam, A. et al. (2019), Global Entrepreneurship Monitor (GEM): 2018/2019 Women’s Entrepreneurship Report, Babson College, Smith College and London Business School, https://www.gemconsortium.org/report/gem-20182019-womens-entrepreneurship-report (accessed on 25 September 2024).

[6] Hill, S. et al. (2024), GEM 2023/2024 Global Report – 25 years and growing, Global Entrepreneurship Monitor, https://www.gemconsortium.org/reports/latest-global-report (accessed on 24 March 2024).

[1] Ministry of Labour, F. (2023), Soglasno sprejeta Resolucija o nacionalnem programu za enake možnosti žensk in moških 2023 – 2030, https://www.gov.si/novice/2023-09-22-soglasno-sprejeta-resolucija-o-nacionalnem-programu-za-enake-moznosti-zensk-in-moskih-2023-2030/ (accessed on 1 October 2024).

[3] Minniti, M. and C. Nardone (2007), “Being in Someone Else’s Shoes: the Role of Gender in Nascent Entrepreneurship”, Small Business Economics, Vol. 28/2-3, pp. 223-238, https://doi.org/10.1007/s11187-006-9017-y.

[7] Nova Ljubljanska Banka d.d. (2020), Izzivi ženskega podjetništva, https://www.nlb.si/izzivi-zenskega-podjetnistva (accessed on 1 October 2024).

[5] Širec, K. and K. Crnogaj (eds.) (2024), Podjetništvo za trajnostno prihodnost: GEM Slovenija 2023, Maribor: Univerza v Mariboru, Univerzitetna založba.

[8] SPIRIT Women portal (2024), Podjetnice, https://www.podjetniski-portal.si/program (accessed on 1 October 2024).