Despite the fact that many women run their own small businesses throughout the world, they still find difficulty getting credit from financial institutions to expand, a phenomenon which a development banker has blamed on sexism.
Vice President of Operations at the Caribbean Development Bank (CDB), Monica La Bennett, said: “While women own two out of three micro- and small business enterprises, 80 per cent of them do not get the credit they need to grow their businesses and create jobs.”
Citing a Barbadian study which was published last September, La Bennett said: “Women tend to get micro loans for small amounts of capital when they are starting out, but when women want to grow their firms and need more funds, they often end up with less money than they requested.
“As a result, they tended to rely on funding from personal loans, getting help from family members, putting whatever money they earned from the business back into it, or credit cards, and that can become an expensive process.”
The CDB official added that collateral was also a challenge for women seeking bigger loans, and evidence showed that “in the few cases where women managed to get loans from commercial banks in the early stages, it was usually because their husband was their business partner or through their own persistence. They also reported that they got discouraged from applying for loans again after being turned down”.
La Bennett continued: “It is also claimed that female entrepreneurs are satisfied with their small size, as it gives them extra income and provides them with the flexibility they need to take care of their families and other aspects of their lives, and also that they are more risk averse than men and more cautious even if they qualify for loans. However, this is not always true.”
The development banker blamed deeply rooted gender stereotype for the challenges facing women in the financial sector.
She said: “Women are fully capable but there are structural barriers in society that prevent them from reaching their full potential, and these are shaped by gender. Removing biases requires training, making the unconscious conscious, standardising procedures, creating data and evidence to challenge perceptions and also requires accountability.”
But she declared that the CDB was working to break down the barriers with women featured prominently in some of the initiatives the bank had undertaken to help micro- and small business enterprises in recent years.
Between 2013 and 2017, the CDB provided $36 million (US$18 million) in lines to micro- and small businesses across the region, from which 78 women benefited, she said.
Over the last three years, the bank funded skills training and technical assistance for over 2,400 entrepreneurs to help them improve their competitiveness, and more than half – 1,400 – of those beneficiaries were women, she added.
The bank also trained 500 women involved in music about the business aspects of their work through the Creative Industries Fund, the CDB official reported.
La Bennett noted: “There is a strong correlation between women’s access to financial services and greater social welfare, because women are more likely to spend their income on health care for their children, improving their housing and education.
“The CDB cannot do this alone; we need to partner with the private sector, especially those organisations dealing with social responsibility, to become advocates for gender equality.”