March 6, 2025 - 10:02
Access to finance is a critical component for the growth and sustainability of businesses, yet women-led enterprises frequently encounter substantial barriers that hinder their financial opportunities. A recent analysis utilizing data from the World Bank Enterprise Survey, which encompasses 61 countries, sheds light on this pressing issue.
The findings reveal that while women-managed firms are just as likely as their male counterparts to apply for and secure credit, they consistently receive lower amounts of funding. This discrepancy is not attributable to differences in risk profiles, profitability, or productivity metrics. In fact, women-led businesses demonstrate a remarkable 15% higher average return on capital compared to those managed by men.
This indicates a troubling trend of gender-driven capital misallocation, particularly in regions where rigid social norms prevail. The implications of such disparities are profound, as they not only limit the growth potential of women-led enterprises but also hinder overall economic development. Addressing these barriers is essential for fostering a more equitable financial landscape.
