Half of world’s female entrepreneurs are denied funding; a third faces gender bias from investors

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Updated: Oct 13, 2019 6:16 PM

The bias against women entrepreneurs gets apparent during the fundraising process when they are asked questions about “their family circumstances, their credibility as business leaders and loss prevention," HSBC said.

35 per cent female entrepreneurs said that they experience gender bias from investors while raising capital. (Source: File photo)

Investment pitches by a whopping 50 per cent of female entrepreneurs globally are denied funding from investors, claimed a report by HSBC Private Banking surveying over 1,200 entrepreneurs across the US, the Middle East, Europe, and Asia between June – July 2019. Hong Kong (68 per cent) and Singapore (59 per cent) are the top cities where women entrepreneurs are most likely to hear no to their investment pitches in contrast to the US (65 per cent) and France (62 per cent) where they are most likely to get a yes from investors.

Moreover, 35 per cent female entrepreneurs said that they experience gender bias from investors while raising capital for their businesses with the UK and the US (54 per cent and 46 per cent respectively) showing the highest levels of such biases even as mainland China (17 per cent) has the least level of gender bias against women entrepreneurs.

The survey suggests that “society as a whole can and must do more to support female entrepreneurs,” said António Simões, Chief Executive Officer, HSBC Global Private Banking.

Also read: RBI exercising forbearance on MSME lending as small business loans are in trouble, says Raghuram Rajan

Respondents said that the bias against them gets apparent during the fundraising process when they are asked questions about “their family circumstances, their credibility as business leaders and loss prevention,” the report titled She’s the Business said.

Another interesting finding of the report claimed highlighted the discrepancy in the investment made in women-led businesses vis-a-vis businesses led by men. The report said that female entrepreneurs across the world are able to raise 5 per cent less capital than male entrepreneurs. The biggest imbalance was seen in the US, France and the UK with 8 per cent, 7 per cent, and 6 per cent respectively.

Among the key things in the survey that women entrepreneurs asked for to reverse this situation is more access to business networks to facilitate more connections in the market, regular reviews of their investment choices by the investors and having mixed investor panels, and lastly clarity on the specific investment criteria in the pitch and more transparent investment process.

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