Bridging the Finance Gap for Women Entrepreneurs

1. Key findings and policy messages

Abstract

While public policies in many countries have increasingly targeted efforts to increase entrepreneurship by women, access to finance remains a major barrier. This chapter summarises the key findings and policy messages of the report on the state of women’s entrepreneurship financing and avenues for policy development to increase access to finance, based on the analysis and policy insights from country examples.

Entrepreneurship activity by women is increasing but still lags behind that of men

Women are less likely than men to pursue business creation. On average, only three women aged 18-64 reported working on a start-up or managing a new business for every four men in OECD countries between 2019 and 2023, according to data from the Global Entrepreneurship Monitor.

Women entrepreneurs are also, on average, slightly less likely than men entrepreneurs to pursue economic opportunities with their businesses. In the period 2019-23, women entrepreneurs were about 5% less likely than men entrepreneurs to be pursuing an economic opportunity, rather than acting out of necessity. This gap is even larger among growth-oriented entrepreneurs, as women were about 41% less likely than men to expect that their business would create at least 19 jobs over the next five years.

There has been progress, however. The gap in start-up rates between women and men reduced in 25 of the 34 OECD countries where data are available between the periods 2014-18 and 2019-23. Countries like France, Ireland, Lithuania, Poland, Romania, Slovenia and the United Kingdom saw significant progress, while the gender gap narrowed to a lesser extent in another 18 countries. Conversely, the entrepreneurship gap between women and men increased in four countries (Finland, Japan, Latvia and Norway).

The variation of the gender gap in entrepreneurship across countries is explained by a range of factors influencing an individual’s decision to start a business. These include differences across countries in attitudes to entrepreneurship by women and men, labour market conditions for women and men, conditions for business creation including the availability of resources to women and men, and the size of the informal economy (OECD/European Commission, 2023[1]). Barriers to entrepreneurship are often inter-connected, leading to heightened barriers for women entrepreneurs. For example, gender norms concerning women’s participation in the labour force can limit their skills development and professional networks for entrepreneurship, which can lead to further challenges in accessing finance to start and grow their businesses.

Access to finance is a particularly important barrier for women entrepreneurs

While access to finance poses challenges for most entrepreneurs, women entrepreneurs often face more difficulties than men in accessing finance. Data from the World Bank Enterprise Survey show that in 2024 women were about half as likely as men to report that they have borrowed funds from a bank to start, operate or expand their business. This gender gap was observed in almost all OECD countries. It stems from institutional and market failures on the supply- and demand-side of financial markets including for example a misalignment of financial products and services with the needs of women-led businesses on the supply-side and lower levels of available collateral held by women on the demand-side, combined with the specific characteristics of women-owned businesses, including the size, sector and age of the firms started by women.

One significant barrier is the documented bias in lending practices and investor preferences. This includes gender stereotyping in lending and investing processes as well as gender bias in credit scoring and risk assessment models. These challenges are often reinforced by a lack of involvement of women in lending and investment decisions.

Other challenges include the nature of the financing request and entrepreneur’s background. Women entrepreneurs typically request smaller amounts of financing than men, which result in higher proportional costs associated with assessing and managing finance for lenders and investors. Many women entrepreneurs also have more limited collateral and credit history information.

When women entrepreneurs receive funding, they often obtain smaller amounts and often under less favourable conditions than men entrepreneurs. Women entrepreneurs on average pay higher interest rates and are required to provide more collateral when they receive loans, even when controlling for loan size. The gender gap in start‑up financing is particularly noticeable among growth-oriented businesses and businesses operating in STEM sectors (science, technology, engineering and mathematics). Globally, women receive only about 2% of total venture capital investments (Teare, 2020[2]) but one important factor is the difference in demand for venture capital (VC) between women and men entrepreneurs. One estimate shows that women entrepreneurs are about 63% less likely to secure VC funding compared to men overall, but nearly two-thirds of this gap can be attributed to differences in growth orientation (Guzman and Kacperczyk, 2019[3]). Further, one estimate finds that women who do receive VC investment, only receive about 70% of the funding that men receive on average (Lassébie et al., 2019[4]). Due to these financing gaps, women entrepreneurs may be less likely to seek investments or loans because they believe that they will not be successful (OECD/The European Commission, 2013[5]). This discouragement can ultimately restrict the growth potential of women-led businesses (Naegels, Mori and D’Espallier, 2022[6]; Kilincarslan and Li, 2024[7]).

The range of issues and entrepreneurs requires multiple policy instruments

Policies for improving access to finance for women entrepreneurs often comprise a range of policy instruments in order to address the multiple facets of the women entrepreneurship financing challenge and the variety of women entrepreneurs and entrepreneurial projects.

As set out in the 2022 Updated G20/OECD High-Level Principles on SME Financing (OECD, 2022[8]) and the OECD Recommendation on SME Financing (OECD, 2023[9]), policy measures to support access to finance for entrepreneurs in general (implicitly targeting both women and men) include actions to address the following types of issues:

• Raising entrepreneurs’ awareness of different types of finance and the available funding sources and their requirements;

• Facilitating the matching between the appropriate finance sources and entrepreneurs and facilitating network creation between entrepreneurs and lenders and investors;

• Developing an appropriate regulatory environment, notably for new forms of finance such as fintech, that balances investor and consumer protection;

• Reducing risk in the market through loan guarantees; and

• Supporting the creation and development of new marketplaces and financial institutions.

It is also important for policy to facilitate a range of financing instruments suited to different types and phases of entrepreneurship, from microbusinesses to high growth potential startups, and different types of entrepreneurs. All the above actions are therefore relevant for building financing for women entrepreneurs but given the finance and entrepreneurship gaps, additional measures could help strengthen finance supply and the reach of policy measures to women entrepreneurs. This includes consideration for how support measures are delivered. Women entrepreneurs may not always access support programmes if they are perceived as being designed and delivered to groups that are comprised of mostly men entrepreneurs. Moreover, women undertake a disproportionate amount of care work, which can affect their availability to go to support centres or participate in training sessions at certain times of the day.

Sometimes governments introduce targets for women entrepreneurs in general government-sponsored finance supports as well as operate dedicated entrepreneurship finance policy measures specifically for women. Some of the most common policy instruments to support entrepreneurial finance for women are loans, loan guarantees and microfinance (ECB, 2020[10]). However, government toolkits are expanding to include emerging tools such as fintech, as well as placing a greater emphasis on boosting investor readiness and introducing a growing number of publicly supported equity programmes for women entrepreneurs. The latter includes venture capital funds or fund-of-funds targeting women entrepreneurs and dedicated envelopes for fund-of-funds investments into women-led venture funds (OECD, 2025[11]; European Investment Bank (EIB), 2020[12]), typically targeting early-stage businesses (OECD, 2024[13]).

This report notes that governments can take advantage of a range of policy actions for women’s entrepreneurship finance. The different tools address issues spanning entrepreneurship culture, financial skills gaps, access to debt and microfinance, access to equity marketplaces and encouraging fintech solutions. All of these can be used to support a wide range of women’s entrepreneurship projects with different ambition levels and goals, at different stages of development, and across different sectors.

Better data on finance use and barriers for women entrepreneurs would support better policymaking

It is also important to collect more evidence on access to finance for women entrepreneurs to shed light on barriers and gaps in financial markets. This is particularly true for new financial markets and instruments such as fintech and crowdfunding that are less well understood. There have been increasing efforts in this area at both national and international levels to address these gaps. For example, the OECD and European Union (EU) produce The Missing Entrepreneurs reports that monitor trends in women’s entrepreneurship and policy developments across OECD countries and EU Member States, including on the issue of access to finance. However, data on the supply and demand of financing of start-ups led by women remain under-developed.

In response, the G20 recognised the importance of data collection and analysis as a priority action in addressing the SME finance gender gap and developed a basic set of gender-disaggregated financial indicators in 2013, as part of the G20 Global Partnership on Financial Inclusion (GPFI) and its SME Finance Sub-Group. The 2022 Updated G20/OECD High-Level Principles on SME Financing and the OECD Recommendation on SME Financing also call for gender-disaggregated data collection (OECD, 2022[8]; OECD, 2023[9]). More recently, the Women Entrepreneurs Finance Code (WE Finance Code) has become established as a global multi-stakeholder effort for systemic change to eliminate barriers in access to finance for women entrepreneurs, with the participation of the World Bank, the OECD, and the Financial Alliance for Women. It includes work to expand the quality and quantity of data on women-led firms’ financing in collaboration with banks and governments in different countries.

Better target financial support measures to the needs of women entrepreneurs and link to non-financial support

A growing range of government policy measures are in place to improve the supply of finance to women entrepreneurs, but there is often a need to better target these measures, reflect local context and offer complementary non-financial supports, such as training, coaching and networking. The policy insight notes in this report show that the measures do not always reach their full potential because they may not be sufficiently targeted to different segments of women entrepreneurs. The policy insight note covering Sweden underlines the need to develop financial products and services that are in line with the needs and ambitions of different types of women-led businesses. For example, women operating small service-based businesses will have different capital needs than those launching ambitious technology-based companies. This is also illustrated in the notes that cover angel financing (Poland and Wales, United Kingdom), which illustrate how the development of women angel investor networks can help women entrepreneurs seeking equity access investors since they are more likely to invest in women entrepreneurs.

Targeted financial measures should reflect their context, including the local institutions, culture and social norms. The policy insight note covering France underlines this, showing how national technology innovation and start-up development programmes are adapted and delivered through a network of 114 “French Tech” regional and local support structures.

Governments can also go further to improve the quality of non-financial services that are offered alongside funding. This includes, for example, increasing the use of leadership training offered by programmes that support high-growth potential women entrepreneurs rather than generic business management training.

Address structural issues affecting access to finance for women entrepreneurs

While the use of dedicated measures can help some women entrepreneurs access funding for their business, there is also a need to address broader structural challenges that hinder access to finance for women entrepreneurs. For instance, in economies such as Canada, Germany and China, high-level strategies with a suite of measures are used to address broader societal issues. This includes, for example, the “She Economy” in China, which is a broader concept that seeks to leverage the contributions of women to spur economic growth. In developing countries, the approaches often focus on education and addressing legal restrictions to entrepreneurship by women, such as the prohibition of property rights, which greatly hinders access to credit. Overall, a multi-pronged approach is needed to address broader structural challenges, including broader education and promotion campaigns to shift societal attitudes towards women’s entrepreneurship.

Increase collaboration with the private sector

The private sector plays a critical role in finding solutions to the gender gap in access to finance. They provide new products and services, change operational practices and get involved in public policy initiatives such as for financial literacy development or delivering guaranteed loans. The majority of the policy insight notes highlights the role of the private sector, such as in relation to angel investors (e.g. Poland) or innovative women entrepreneurs (e.g. Finland). In addition, the private sector can amplify government efforts through co-investing schemes, including through angel networks, risk capital and crowdfunding platforms. Examples can be found in several notes such as those covering Wales, United Kingdom and New Zealand.

One of the priority challenges is to address the lack of women in decision making roles in private finance organisations such as banks, VC funds and investor networks. Training programmes and support for women in investor networks as well as new networks aimed at investing in women entrepreneurs are opportunities. Several examples are illustrated in the country policy insight notes, covering angel investment and financing growth-oriented entrepreneurs.

References

[10] ECB (2020), Funding women entrepreneurs; How to empower women growth, https://www.eib.org/attachments/thematic/why_are_women_entrepreneurs_missing_out_on_funding_en.pdf (accessed on 16 December 2024).

[12] European Investment Bank (EIB) (2020), Why are women entrepreneurs missing out on funding? - Reflections and considerations, https://www.eib.org/attachments/thematic/why_are_women_entrepreneurs_missing_out_on_funding_summary_en.pdf (accessed on 21 August 2025).

[3] Guzman, J. and A. Kacperczyk (2019), “Gender gap in entrepreneurship”, Research Policy, Vol. 48/7, pp. 1666-1680.

[7] Kilincarslan, E. and J. Li (2024), Women are routinely reluctant to seek business finance, London School of Economics and Political Science Blog.

[4] Lassébie, J. et al. (2019), “Levelling the playing field : Dissecting the gender gap in the funding of start-ups”, OECD Science Technology and Industry Policy Paper, No. 73, OECD Publishing, Paris, https://doi.org/10.1787/23074957.

[6] Naegels, V., N. Mori and B. D’Espallier (2022), “The process of female borrower discouragement”, Emerging Markets Review, Vol. 50, p. 100837, https://doi.org/10.1016/j.ememar.2021.100837.

[11] OECD (2025), “Benchmarking government support for venture capital: A comparative analysis”, OECD SME and Entrepreneurship Papers, No. 71, OECD Publishing, Paris, https://doi.org/10.1787/81e53985-en.

[13] OECD (2024), Financing SMEs and Entrepreneurs 2024: An OECD Scoreboard, OECD Publishing, Paris, https://doi.org/10.1787/fa521246-en.

[9] OECD (2023), OECD Recommendation of the Council on SME Financing, OECD, Paris, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0493 (accessed on 16 November 2024).

[8] OECD (2022), 2022 Updated G20/OECD High-Level Principles on SME Financing, OECD Publishing, Paris, https://www.oecd.org/cfe/smes/2022-Update-OECD-G20-HLP-on-SME-Financing.pdf (accessed on 25 September 2023).

[1] OECD/European Commission (2023), The Missing Entrepreneurs 2023: Policies for Inclusive Entrepreneurship and Self-Employment, OECD Publishing, Paris, https://doi.org/10.1787/230efc78-en.

[5] OECD/The European Commission (2013), The Missing Entrepreneurs: Policies for Inclusive Entrepreneurship in Europe, OECD Publishing, Paris, https://doi.org/10.1787/9789264188167-en.

[2] Teare, G. (2020), Global VC Funding to Female Founders Dropped Dramatically this Year, https://news.crunchbase.com/news/global-vc-funding-to-female-founders/ (accessed on 10 January 2025).