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Why banks must break down the barriers for women, fast

Anne McPherson , The Guardian, Wednesday 4 September 2013

Women entrepreneurs establish their businesses much faster then men, but they are held back by the barriers on funding

A recent entrepreneurship study by RBS Group made the surprising discovery that women establish their businesses much faster then men.

Despite prevailing stereotypes about women being more risk-averse and less headstrong, our research revealed that nearly two-thirds (66%) of women who own their own business had set it up within 12 months of having the idea. By contrast, the proportion of men who converted their idea into enterprise within a year was around 10% lower.

I have witnessed this trend first hand. Serena Smith is an RBS Group customer who decided to start her own company soon after inspiration struck her at a friend's party. Seeing the unusual sight of a pole in the middle of the bedroom, Smith quickly recognised the potential of pole dancing as a fun and innovative way for people to keep fit.

By acting fast and trusting her business instincts, she was soon able to capitalise on the growing popularity of pole fitness and create an organisation, Dance Fitness Limited, that taught people the skills they need to get dancing.

Within 12 months, she had built up a loyal following of customers across Lancashire, and three years on she has expanded the operation and now has three employees. Her success demonstrates the importance of spotting an opportunity and going for it, backed up by an awful lot of hard work.

But while the speed at which women are launching their businesses is encouraging, unfortunately it is just one part of a far more complex picture. Women may be acting quickly, but overall levels of female business ownership in the UK remain dwarfed by long-standing gender imbalance.

For example, men are still twice as likely as women to start a business in the UK, with less that one in five (19%) of British businesses currently female-owned.

We have found that the majority of budding female entrepreneurs are hindered by a lack of self-belief. While men and women identified similar traits as being vital for business success - working hard, admitting to mistakes and having confidence - there is a discrepancy when it comes to men and women recognising those skills in themselves and using them to start a company.

It is this lack of confidence that is hurting our economy by holding back female entrepreneurs - a damaging fear of failure dominates the SME sector. Nearly half of all women (42%) we spoke to reported that they wanted to start a business but hadn't because of fear that it would fail.

This fear factor is reflected in the comparatively low numbers of women asking their banks for support in starting a business. Our records show that women are less likely to apply for funding than men and, where women do want to take out loans, these are tailored to reflect their more cautious attitudes to risk.

We have tailored our services to meet the different needs of female entrepreneurs and commit £500,000 every year to specifically support female-led SMEs through our Inspiring Women in Enterprise programme.

We are also undergoing a comprehensive independent review of all of our lending practices - engaging with our customers to "listen on lending" and make sure we are offering them the services they want.

We know there is more to be done. Addressing this entrepreneurial gender imbalance will not change overnight. But, as a country we can't afford to allow female entrepreneurial talent to go unfulfilled.

So, if you a woman and have always wanted to build your own business, now is the time to come in and talk to someone from your bank about how to make it happen.

Original Article