How FinTech Is Helping Businesswomen Find Funding
As society grows less and less trusting of “the man” or “big business” and seeks out alternative options as much as possible, entrepreneurs need to be more knowledgeable of their options when it comes to business funding. This is especially true for women, who were already facing an uphill battle when it comes to funding. A study done by Harvard Business School found that there is a definite gender bias at play: when pitching the exact same concept, 68% of men received funding interest versus 32% of women. Female entrepreneurs also pay higher interest rates and get offered smaller loans. The fiercest battle is being fought in developing countries, where 70% of women-led businesses face intense roadblocks when seeking financial backing. It is quite clear that business financing for women needs a new look. The good news is, if you choose (or are forced) to not rely on the typical funding route, there are systems set up to help women get financial support, thanks to FinTech.
The peer-to-peer lending marketplace is a great example of an alternative funding option that has proven successful for businesswomen. Relatively new, this industry has exploded in popularity and will only continue to grow. In fact, according to Transparency Market Research, the global peer-to-peer market will be worth almost $900 billion by 2024. Similar to crowdfunding, business owners apply to get funding from outside investors. Through platforms operated by companies like Lending Loop or LendVantage, startup owners can access the peer-to-peer lending marketplace and present themselves to potential investors. This growing peer-to-peer marketplace is excellent news for women seeking to conquer the business world in North America (and beyond).
This push to equalize the business field extends beyond the western world. There is a concerted effort to get more women in developing countries involved in entrepreneurship and giving them access to funding is a major part of this. Knowing this, the World Bank created the Women Entrepreneurs Finance Initiative (We-Fi). By providing funding to multilateral development banks (MDBs), We-Fi aims to make it easier for underfunded female entrepreneurs to access funding and get them on the road to business success. Supported by many federal governments (including Canada and the U.S.), We-Fi has the real potential to open doors for so many entrepreneurs who likely never would have received funding otherwise.
We-Fi is not the only option for women in developing countries who are aiming to conquer the business world. Peer-to-peer lending also extends to the third world and unbanked communities and this means investors wanting to aid in the development of startups working in these areas have the opportunity. Through platforms like Amartha, people around the world can invest in startups that will change the world for people that have been underserved for a long time. Amartha seeks to provide business loans to the unbanked, connecting them to investors and allowing them to build their company. Business investors looking to make a real and positive impact in the world should definitely explore this option.
The business world is stronger when women have a notable presence. In fact, multiple studies (by the Peterson Institute, MSCI, etc.) have shown that companies with women in leadership roles outperform the competition. Given this reality, aspiring businesswomen should definitely take the initiative to enter the marketplace. If you know the right avenues to take to access funding, your startup could be ready for business before you know it. The time is right for women to take their equal place in the boardroom and the marketplace and FinTech startups are the way to do this.