Research: How to Close the Gender Gap in Startup Financing

Research: How to Close the Gender Gap in Startup Financing  HBR.org Daily

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Apr 13, 2024 - 10:00
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Research: How to Close the Gender Gap in Startup Financing

Research: How to Close the Gender Gap in Startup Financing

A Global Analysis of Women Entrepreneurs and Business Loans

Introduction

A global analysis of previous research over the last three decades shows that women entrepreneurs face a higher rate of business loan denials and increased interest rates in loan decisions made by commercial bankers. Interestingly, the data also reveals that the formal and informal standing of women in a particular society can provide clues to some of the true hurdles to positive change. This article reviews these hurdles, and offers three recommendations for change.

Sustainable Development Goals (SDGs)

  1. Goal 5: Achieve gender equality and empower all women and girls.
  2. Goal 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.
  3. Goal 10: Reduce inequality within and among countries.

Recommendations for Change

  • 1. Increase access to financial education and resources for women entrepreneurs.
  • 2. Implement policies and regulations that promote gender equality in loan decision-making processes.
  • 3. Foster supportive networks and mentorship programs for women entrepreneurs.

SDGs, Targets, and Indicators

1. SDGs Addressed or Connected to the Issues Highlighted in the Article

  • SDG 5: Gender Equality
  • SDG 8: Decent Work and Economic Growth

The article discusses the challenges faced by women entrepreneurs in accessing business loans and highlights the gender disparities in loan decisions made by commercial bankers. This directly relates to SDG 5, which aims to achieve gender equality and empower all women and girls. Additionally, it is connected to SDG 8, which focuses on promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

2. Specific Targets Under the SDGs Based on the Article’s Content

  1. Target 5.1: End all forms of discrimination against all women and girls everywhere.
  2. Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life.
  3. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.

The article highlights the discrimination faced by women entrepreneurs in terms of higher loan denials and increased interest rates. Target 5.1 aims to end all forms of discrimination against women, including in economic aspects such as access to loans. Target 5.5 focuses on equal opportunities for women in economic decision-making, which includes access to financial resources. Target 8.3 promotes policies that support entrepreneurship, which is relevant to the challenges faced by women entrepreneurs.

3. Indicators Mentioned or Implied in the Article

  • Indicator 5.1.1: Proportion of women and girls subjected to violence in the previous 12 months.
  • Indicator 5.5.1: Proportion of seats held by women in national parliaments and local governments.
  • Indicator 8.3.1: Proportion of informal employment in non-agriculture employment, by sex.

While the article does not explicitly mention indicators, it implies the need to measure the proportion of women facing discrimination and violence in economic aspects, which can be measured using Indicator 5.1.1. Additionally, the article discusses the informal and formal standing of women in society, which can be measured using Indicator 8.3.1 to assess the proportion of women engaged in informal employment.

Table: SDGs, Targets, and Indicators

SDGs Targets Indicators
SDG 5: Gender Equality Target 5.1: End all forms of discrimination against all women and girls everywhere. Indicator 5.1.1: Proportion of women and girls subjected to violence in the previous 12 months.
SDG 8: Decent Work and Economic Growth Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life. Indicator 5.5.1: Proportion of seats held by women in national parliaments and local governments.
Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation. Indicator 8.3.1: Proportion of informal employment in non-agriculture employment, by sex.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: hbr.org

 

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