First Project Exchange Visit - United Kingdom, February 5-6, 2007

Purpose

The purpose of the exchange visit was to learn about strategies and best practices for supporting women’s entrepreneurship and access to microloans. Twenty people participated in the exchange visit. Participants met with entrepreneurs and support organisations in the following locations: Liverpool, Manchester, Norwich and London. The exchange visit concluded with the Prowess Annual Conference held in Brighton on 7-8 February. Prowess is a well known and highly successful UK-wide network promoting women friendly business support.

Organisations Visited

Exchange visit participants studied the following questions

  • Profile of women entrepreneurs supported by the host organisations;
  • Barriers faced by women and strategies developed to overcome these;
  • Access to Finance: Which microloan product is best suited to women? Loan amounts, deferment periods, interest rates, loan term, guarantees. Which delivery methods work well? Group loans, individual loans;
  • Outreach and Communication: How best can microlenders reach women clients? What language should be used to market and communicate about microloan programmes?
  • Training and Technical Assistance: What are women’s specific training and support needs? What strategies work best for meeting these needs?

Learning Points

The following is a summary of the main learning points from the visit.

Women and Access to Finance

  • Women in the UK’s businesses are underfinanced when they start which affects the growth and sustainability of their businesses;
  • Women’s businesses in the service sector tend not to get funding;
  • Women pay 1% more for their borrowing than men do.

Women that the host organisations target tend to

  • Have lower self-confidence than men.
  • Have childcare/parent care responsibilities.
  • Be cautious about taking risks and reluctant to get into debt.
  • Have no collateral/few assets.
  • Lack a credit history.
  • Be caught in the “benefits trap” (in the UK single mothers receiving welfare benefits can not test trade and still keep their benefits. Other entrepreneurs can test trade for 6 months whilst maintaining benefits).

Outreach

  • The best places to reach women are where they spend most of their time: schools, public libraries, places of religious worship, mother and children’s groups, doctors’ offices, food shops, internet.
  • It is important to work with community leaders and influencers who can talk about the microloan programme. This is particularly true for immigrant and ethnic minority communities in the UK.
  • Women have a range of employment and caring responsibilities. Events and outreach need to be scheduled at all times of the day to reach the widest number of women: early morning, during school hours, evenings. There should also be variety in the length of sessions: 2 hours, ½ day; full-day.
  • Provide child care for women with children below school age. Travel and subsistence allowances help women in deprived communities access networking, microlending and business support services.
  • Significant confidence building is needed. One to one support, networking and role models help women build their confidence about their business idea.

Communication

  • Press and publicity needs to be informed by a good knowledge of the profile and lifestyles of women being targeted.
  • Documents and flyers should clearly state that the organisation “welcomes loan applications from women.”
  • Use positive women role models who have successfully launched and grown their businesses.
  • Be aware of the language you use. In the UK, women do not like the word “entrepreneur”. They prefer concepts such as: “working for myself” and “creating my own job.”
  • The profile of microlender staff should reflect the profile of the women and communities being targeted.
  • Staff should have gender sensitivity training.

Assessing Microloan Applications

  • Avoid credit scoring. Lending criteria must take account of women’s financial history which is often very different from that of men. Many women who are, or have been, dependent upon a husband or male partner do not have credit histories or assets.
  • Look carefully at the loan amounts. Women tend to wish to borrow less than men but this may result in their business being undercapitalised.
  • Make sure there is no lending discrimination with respect to sector. Women tend to start businesses in the service sector, which is one of the most difficult to get funded from mainstream banks.
  • Always have face to face meetings with women applicants. Women are very good at explaining their business ideas and plans in face to face interviews. Often their written business plans are less strong.
  • Offer to go to where the women are for meetings rather than expecting women to come to the office. Male loan officers should be aware that it may not be appropriate to meet with women clients on their own. Offer to bring along a female colleague. Have the applicant bring a long a friend or family member.

Microloan Products

  • Find alternatives to collateral and guarantee requirements. Access external guarantees when possible. Group lending can replace the need for collateral and guarantee;
  • Consider a joint funding package with another organisation in order to ensure that the business is adequately funded;
  • Provide an on-going package of training, support and confidence building after loan disbursement.