Wednesday, 1 June 2005
Female entrepreneurs face loan rate discrimination
The research, which was supported by a consortium of major business organisations and banks, found female-owned businesses typically paid 2.9 percentage points over the base rate on business loans, while male owned businesses paid just 1.9 percentage points.Stewart Dickey, a director at the British Bankers' Association, said the survey had given his organisation food for thought, but could not offer any explanation why banks treated female-owned businesses this way."We don't really know why women are being offered different rates," he explained. "The message to banks is that this disparity should even out and disappear."The good sign is that women aren't experiencing any other different problems to men. They aren't having any problems finding finance."Overall, the survey found that apart from higher loan rates, women's experiences of raising finance tallied with those of their male counterparts on issues such as ease of accessing finance, rejection rates and level of finance sought.Erika Watson, executive director of Prowess, an association supporting women's enterprise, said: "For this practice to change, traditional lenders need to be more progressive in the way they handle female-owned businesses. They must stop making the old assumptions about women's businesses and recognise that many women are going into sectors and employing new ways of working."Lenders will eventually lose out on a growing market if they don't catch up with these new trends."The survey also found that ethnic minority-owned firms paid just over 1.2 percentage points over the base rate, lower than both female and male white-owned businesses.Stewart Dickey from the British Bankers' Association said the lower rates for ethnic minority businesses reflected banks efforts to encourage enterprise in this area.
- To read a copy of the report visit www.wbs.ac.uk/go/sme0505
© Business Hotline Publications Ltd 2005Back