Fostering Gender Equality: Meeting the Entrepreneurship and Microfinance Challenge

Project Background

Women and Entrepreneurship in the EU

  • The number of self-employed women or women running microentreprises in Europe is low when compared to men. Only 30% of enterprises in Europe are run by women (Middlesex University 2000);
  • 87 % of women entrepreneurs run microenterprises (Eurochambers, 2004);
  • Women entrepreneurs cite access to finance as the most significant constraint affecting the launch, growth and sustainability of their businesses (Eurochambers, 2004);
  • On average, women in the European Union start their businesses with less capital than men do, inhibiting the growth prospects of the business at a critical juncture in its development;
  • The majority of women’s businesses are in the service sector. Service sector businesses tend to have fewer physical assets to offer as collateral for bank lending and require relatively less financing than banks are used to or prefer to provide.
  • In the UK, women pay a 1% higher interest rate than men on business loans.

Women and Microfinance in the EU

  • Given the above context, many interested in women’s entrepreneurship see great potential for microlending programmes to better meet women’s financing needs;
  • A recent survey conducted by the European Microfinance Network (EMN) shows that as of 2004, only 39% of microloans reported in the survey were disbursed to women;
  • The EMN survey results suggest that this relatively low rate of microlending to women is the result of the way in which microfinance provider programmes are designed and implemented, with matters aggravated by a range of factors external to the microfinance providers.

What can this project do to promote gender equality in European microfinance?

  • In response to the survey findings, this project focuses on improving microlender practice so that loan products, communications strategies and support for women entrepreneurs take account of their specific needs;
  • Exchanges between EMN members working on access to finance for women entrepreneurs will identify new ideas, best practices and strengthen exchange;
  • The project will bring together up-to-date information related to women and entrepreneurship initiatives at the European level;
  • The project will assist actors and policy makers to improve the environment for women microentrepreneurs and self-employed;
  • The project will reinforce the capacities of actors across the EU to implement properly designed projects through dissemination of information and good practice.