A global review of female entrepreneurial finance (original) (raw)

Financing of women-owned ventures: The impact of gender and other owner -and firm-related variables

Venture Capital, 2006

While women-owned ventures represent an increasing proportion of new businesses in most western countries, most of them have particular financing patterns and encounter barriers in their access to financing. Recent research on the question argues that barriers to financing are mainly dependent on factors other than gender, such as owner-and firm-related characteristics. This quantitative and qualitative study, through descriptive statistics and interview analysis, examines the relationship between financing patterns and barriers and gender from the woman entrepreneur's viewpoint. It explores the behaviours and representations of women entrepreneurs towards financing, and considers to what extent the women see their own approaches as being different from those of men. Our study suggests that a gender effect still exists, and tries to identify its location and the corresponding implications for further research and action.

Start-Up Financing Sources: Does Gender Matter? Some Evidence for Eu and Romania

Although financial resources are very important in SMEs in general, and for start-ups in particular, many entrepreneurs face numerous restrictions in finding sources for start-up financing. The present article aims to investigate the similarities or differences in start-up financing sources due to gender issues, otherwise to investigate if female entrepreneurs use (or have access) different financial sources in the early stage of their business. As reported by the literature, access to finance is one of the most important issues for SMEs and nascent entrepreneurs. Moreover, among the main financial issues, the first one is the access to start-up finance (Schwartz, 1976; Carter and Cannon, 1992; Johnson and Storey, 1993; Koper, 1993; Van Auken et al, 1993; Carter and Rosa, 1998, FOBS survey 2005). In all sectors, women use for starting up businesses substantially less capital then men. Women encounter, more then men, credibility problems when dealing with bankers. This problem causes...

Informal Personal Financing of Entrepreneurs: Gender Characteristics

Universal Journal of Accounting and Finance, 2021

The Aim of the article is in the assess indicators characterizing informal personal financing of entrepreneurs in different countries. Initial information used in our research is the data obtained in the course of the survey habitats of various countries (Global Entrepreneurship Monitor). In the course of the study we consider the indicators characterizing investment activity of men and women on three options including financing of the entrepreneurs who are their relatives, colleagues, friends and acquaintances. The assessment of the levels of nine indicators used economic-mathematical modeling based on density functions of normal distribution. The use of these functions allows defining medium values and ranges changes in considered indexes typical for most countries. In addition, the survey identifies the national economies which are characterized by the maximum and minimum data nine indicators. The study demonstrates that there is a gender gap in the data for various states. The scientific novelty and originality of this research are as follows: the indicators of external investment in firms created by entrepreneurs in different countries have been estimated; the assessment of nine indicators characterizing external investments for start-up entrepreneurs has been modeled; presents a high difference in the values of considered indexes in different countries has been shown; countries with maximum and minimum values of each indicator. It has been proven: proportion in a number of involved men in informal financing of created SMEs established by their relatives in most countries is lower than the same indicator of women, and men proportion involved in informal financing of the new SMEs created by their colleagues, as well as friends and neighbors in most countries is higher than the same indicator of women. Further research can be aimed at detailing the structure of informal financing recipients among entrepreneurs.

Impact of gender on small and medium-sized entities’ access to venture capital in South Africa

South African Journal of Economic and Management Sciences, 2018

This article considers a distinct source of funds in the form of venture capital, which plays a crucial role in small and medium-sized entity (SME) start-ups and growth (Lucey 2010). Besides the provision of equity (venture capital) to fast-growing privately owned firms, venture capital fund managers have advanced expertise in contract negotiations, and hence they function as financial intermediaries, managers, and often as directors (Kortum & Lerner 2000). Research reveals that in some countries, for example the United States of America (USA), venture capital is the major contributor to growth and success of SMEs in sectors such as biotechnology and information communication technology (Gompers & Lerner 2001; Jeng & Wells 2000). Memba, Gakurwe and Karanga (2012), in their study conducted in Kenya, concluded that venture capitalists' investment in SMEs facilitated wealth creation in ways that improved people's livelihoods. Memba et al. (2012) further argued that venture capital is the best source of business finance, although it is seldom used. In addition, their findings revealed that venture capital has a positive impact on SME growth. Background: The debate on the influence of gender on small and medium-sized entities' (SMEs) access to finance from a demand-side perspective is still ongoing. This study seeks to contribute to the debate from an emerging economy (South Africa) perspective. Aim: The study investigated whether there is a gender gap in SME access to venture capital, a distinct source of finance. Setting: SMEs play a significant role in South Africa's economy. Despite the importance of SMEs, access to finance is one of the major constraints affecting their success rate. Globally, to enhance the probability of SME survival, small business practitioners and governments are in search of relevant support measures. One of those measures could be adequate access to venture capital. However, it is sad to note that SMEs seldom use this distinct source of finance. Methods: The study made use of the quantitative method of research and is descriptive by design. Self-administered questionnaires were emailed to respondents for the purposes of gathering primary data. The t-test was used to statistically analyse primary data. Results: The results reveal that there is a statistically significant difference in the accessibility of venture capital between male-and female-owned SMEs. Conclusion: The article concludes that a gender gap in access to venture capital exists owing to differences in business approach between female entrepreneurs and their male counterparts. Female entrepreneurs are cautious about the level of risk they are willing to take and the amount of control they wish to exercise in firm ownership.

A Study of Assistance Provided By Financial Institutions in Promoting Women Entrepreneurship

Women entrepreneurs make a significant contribution to the Indian economy. There are nearly three million micro, small, and medium enterprises with full or partial female ownership. As with the broader MSME sector, access to formal finance is a key barrier to the growth of women-owned businesses, leading to over 90 percent of finance requirements being met through informal sources. So financial institution aims at tailoring the needs of women owned MSME. The present study endeavors the role of financial institutions in understanding the need of women, the financial gap in accessing the credit and the hurdles faced by them.

Financial Development, Gender and Entrepreneurship

2009

Female entrepreneurs are much less frequent than male entrepreneurs. In this paper we investigate a possible culprit: access to financial services. We use a dataset with entrepreneurship rates by opportunity and by need from the Global Entrepreneurship Monitor and indicators of financial institutions from Beck, Demirguc-Kunt and Levine (2000) for 41 developed and developing countries from 2001 to 2004. Our conclusions are that financial development, though generally encouraging entrepreneurial activity, is unlikely, by itself, to contribute to bring male and female entrepreneurship rates closer together. Moreover, our results suggest that it is entrepreneurship by need that is most affected by financial development, suggesting that the possible more complex aspects of evaluating projects associated with market or technological opportunities are not overcome by aggregate financial development and need more specific measures.

A survey on funding MSMEs and female entrepreneurs in MENA countries and the microfinance issue

Research Papers in Economics, 2021

The paper is devoted to the funding of Micro-, Small and Medium-size Enterprises from six non-oil exporting countries from Middle East and North Africa, with a focus on female entrepreneurs and the microfinance industry. Funding theories display contrasted outcomes. On the demand-side, the capital structure of firms, size and collateral have a positive impact on leverage, in line with trade-off theory, whereas profitability and growth opportunities exert a negative effect, consistent with peckingorder theory. On the supply-side, credit rationing from banks harms female entrepreneurs. Discrimination of female entrepreneurs proves non-existent according to the World Bank Enterprise Surveys, whereas self-selection takes place. However, this is inconsistent with the importance of females borrowing from microfinance institutions (henceforth MFIs). There is mixed evidence that MFIs cope with the dual challenge of ensuring both financial selfsustainability and social performance (poverty alleviation). The same applies to Islamic microfinance. MFIs are no panacea in as much as they target poor people rather than the very poor, and funding small business has no visible macroeconomic impact. Nevertheless, microfinance promotes inclusive growth, supports female entrepreneurship and job creation. Following the COVID recession, MFIs face a dilemma regarding defaulting clients, conducive to short-term liquidity and longer-term solvency issues. Keywords: Entrepreneurship; Females; Funding; MENA; Microfinance; MSME. JEL: G21; G32; O17.