A recent survey on women and banking conducted by The Female Social Network found 59% of respondents had experienced an overall negative attitude from banks towards female business owners.
That’s almost six in ten walking away dispirited or disillusioned by their banking experience. You could understand a figure of maybe 25% as perhaps reasonable, but almost 60% points to something wrong in the relationship between women and banks.
That’s not great for female entrepreneurs. But it’s also not great for banks and financial lending institutions, nor for the overall economy. That’s because if we want to grow our economy and create more wealth, it makes sense to empower women to start and grow businesses.
Some of the other findings of the TFSN Women, Money, Business and Banking survey included:
- 54% of female entrepreneurs used family and friends or savings to fund their business
- 27% of female entrepreneurs would not feel comfortable approaching or pitching to a bank
- 49% chose ‘other’ banks, lenders and credit cards as their preferred source of funds rather than any of Australia’s big four banks
The results show a gap in understanding and communication between banks and women, with many women making comments like this about their experiences with banks:
- “Unless female entrepreneurs receive grants they are left asking family and friends or using credit cards.”
- “They could not see the value or potential of my business.”
- “I don’t think they take us seriously.”
While this state of affairs is obviously a problem for female entrepreneurs in this country, it also represents a potentially missed opportunity for banks and other financial institutions.
There are several studies and reports released in the US, UK and Australia over the past few years which conclude that activating female entrepreneurship and supporting women in business could result in massive gains for national economies and the global economy overall. Looked at through the lens of latent opportunity, the potential across developed economies like Australia’s is vast.
As a measure of global opportunity, a McKinsey report released in 2012 estimated the value of advancing women’s equality through workforce participation, managerial opportunity and entrepreneurial activity could add $12 trillion to global GDP by 2025.
In 2013, the UK Women In Business Council released a report which estimated that by equalising men’s and women’s economic participation rates, the UK could add more than 10% to the size of its economy by 2030.
The benefits of more female entrepreneurs with increased access to opportunities and funds are plainly apparent. We’re seeing more and more success stories in Australia as female entrepreneurs take their businesses beyond Australia and out into global markets.
One of these recent success stories involves the billion-dollar ‘unicorn’ valuation for graphic design marketplace Canva, which has Melanie Perkins as one of its co-founders, following its recent $40 million funding round. But Canva is far from the only startup with a female founder making a name for itself, with Jodie Fox at Shoes of Prey and Nyree Corby at Fame and Partners also at the vanguard of Australian female entrepreneurs making waves with investors.
Anecdotally, as the founder and CEO of The Female Social Network, I could tell you about many more Australian women doing incredible things with their businesses. There is no doubt the talent and hunger is there, but what’s missing so often is the finance required to make it all happen, especially in the early stages. This is the feedback we received in the survey and it’s what I hear most often when talking to women in business.
Imagine what could be achieved if banks and other financial lending institutions started listening to female entrepreneurs and working with them? We are very lucky in Australia to have one of the most stable and prosperous banking sectors in the world. We are also very lucky to have a pool of highly talented, educated, and savvy female entrepreneurs. The only thing missing at the moment is how we bring these two parties together.
Once we work out how to do that, we could see incredible growth in our economy spurred by this wave of female entrepreneurship, benefitting women, our economy and society, and the ever important bottom line of our banks.