Women still receive significantly less funding for their businesses than male entrepreneurs, according to the second annual national study by Code-V, the Dutch alliance for stimulating female entrepreneurship. Interestingly, the main hurdle is not the outright rejection of funding applications, as women have their applications approved just as frequently as men at most lending institutions. Instead, the root of the problem lies in the lower number of applications submitted and the smaller size of the loans granted. Only 8.6 per cent of female entrepreneurs submit a funding application compared to 13.2 per cent of men, meaning women ultimately receive just 26 per cent of all awarded business finance and get nearly 25,000 euros less on average per approved loan.
The disparity in loan sizes varies dramatically depending on the type of financial institution providing the backing. The gap is smallest at traditional banks and alternative lenders for small and medium-sized enterprises, where women receive on average 12 per cent less capital per approved grant than men. However, in the high-growth venture capital sector, female entrepreneurs fall behind on two fronts. They receive significantly smaller amounts, averaging nearly 750,000 euros less per grant, and their applications are successful less frequently, with only 9.1 per cent of capital requested by women being granted compared to 16 per cent for men.
Chantal Korteweg, the director of Code-V, has stressed that this is not simply a diversity issue, but rather a systemic flaw that is costing the Dutch economy serious money. Failing to fully support female-led businesses means the country is missing out on a massive source of economic expansion. In fact, research by ABN AMRO and McKinsey estimates that resolving this funding inequality could unlock a potential growth engine worth a staggering 139 billion euros per year.
@anp | NEWS BRAINPORT
