Women entrepreneurs need a tribe of their very own

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Subscribe to enjoy similar stories. Globally, women are the ones who have been managing household finances. However, when it comes to business finances, women are significantly under-represented.

Even so, studies also show that women outperform men in fund management and credit repayment, which would suggest financial acumen among them. Why is it, then, that when it comes to starting a business, women are not asking for money? In our study of 898 women entrepreneurs (WEs), we found that less than 40% of them seek financial support from banks. Our study also revealed that more than 60% of WEs face several challenges while seeking financial support from banks.

This brings us back to the question: Are WEs not asking for money? Or are WEs are not getting the money? We found that WEs often do not ask for money because they are not confident of their financial knowledge. This is on account of their gendered socialization that imposes a self-limiting belief which hinders their willingness to take financial risks. Despite this, even when some women attempt to access credit, gender stereotypes held by loan officers, who are typically a male, contribute to unequal distribution of credit between men and women.

Data from World Bank affirms the same, with men receiving credit equivalent to 52% of their deposits, while women get only 27%. To overcome these self-limiting beliefs, women need to cultivate self-efficacy—a sense of self-assurance in one’s capacity to perform, cope and succeed under any adversity—in financial matters. Women at all levels and various stages have faced some challenge or the other while asking for money or in the process of getting it.