The banking industry is facing significant changes: there is a growth of FinTechs and Challenger Banks, a rise of hackathons, open banking and innovative partnerships are emerging. To me, it is a really exciting time to be part of banking and there is a feeling that anything is possible.
However, turning to BBC News the other day, I saw a statistic that really saddened me….
Only 1% of venture capital funding goes to female-run companies
With £6.3bn committed to early stage companies in 2018, it seems bizarre to think that only a tiny fraction is going to female led business despite half of our population being women. On looking into this further, the consensus seems to be that there are two things that need to happen:
- Female entrepreneurs need to overcome perceived and real barriers to truly back themselves and their businesses – the Alison Rose Review published in March this year showed that only one in three entrepreneurs in the UK are female and there are a number of barriers preventing greater lending to women. The perceived cost to the economy of this discrepancy between lending to male and female led businesses is £250bn.
- More women making investment decisions, with greater diversity seen within venture capital funds – Diversity VC’s 2019 report outlines that women comprise only 30% of the venture capital workforce. The likelihood is that decisions on investment in female-led companies are made by men.
We are currently working with a Corporate Bank who specialise in the innovation economy, most specifically supporting businesses, from early start up stage right through their growth journey, to becoming large and thriving businesses. This is such an exciting area of the market to be a part of and it would be fantastic to see an increase in female-led businesses in the future.
We are interested to unpick this topic further at Baringa so have launched a four-part video series to explore the lending gender bias.
Watch the first video in the series below: