Report: Women-owned businesses marginalised by banks
Women-led firms receive less than two per cent of the long-term financing distributed to regional businesses, according to new research done by Compete Caribbean.
The findings of the report on Enterprise Marginalisation and Gender: Tracking the Experiences of Caribbean Women Entrepreneurs (2015 to 2018) was presented on Tuesday by Executive Director of Compete Caribbean Dr Sylvia Dohnert de Lascurain at the launch of the SheTrades Hub platform at the Caribbean Development Bank.
The study tracked 61 women entrepreneurs for 30 months, employing both quantitative and qualitative data. Its findings were that the ability to expand sales correlated with growth and higher employment levels, and that businesses may underperform when owned by women because of constraints.
The top two identified constraints for growth for all the entrepreneurs were access to growth financing and access to skilled staff. Once staff acquired skills, they left to become competitors.
Dr Dohnert said the research highlighted a lack of appropriate skills with respect to marketing, which affected the companies.
“Lack of self-confidence was also noted as a differentiator between women and men-owned businesses, especially in relation to adopting new technology,” said the Compete Caribbean head.
“The double burden of caring for families and a feeling of responsibility to the community imposed additional burdens,” she added.
For women involved in businesses, which have typically been the domain of men, such as sports, difficulties were compounded by client perception of a woman operating in a male-dominated field. The report, which was prepared by Jonathon Lashley, Katrin Smith and Luwayne Thomas, concluded that gender discrimination remains a challenge to be addressed.
“Support services need to help women gain self-confidence and better manage their responsibilities including taking care of family,” Dohnert said.
Other research financed by Compete Caribbean on women and firms done over various periods was also discussed at Tuesday’s event.
“In each of these efforts we cover 2,000 firms across the Caribbean,” said Dohnert, adding that the data collected related to performance and behaviour.
Eighty per cent of Caribbean business are either owned solely by men or are firms where men have more than 50 per cent ownership.
In contrast, women ownership ranged from 15 to 25 per cent, with Jamaica and The Bahamas being among the highest and Trinidad & Tobago among the lowest.
Women-owned businesses were found to be predominantly concentrated in food service and hotels. The firms or ventures were also smaller.
“It shows women owned businesses face distinct barriers to growth,” Dohnert.
Additionally, they only make up one-quarter of all exporting firms, which Dohnert both said was an indication that they face special difficulties in exporting and that some firms “are inward looking and are not particularly interested in export.”
As for the financing of women businesses: “There is a difference in the way women access credit,” she said.
From research done by the Inter-American Development Bank in 2020, which reviewed a 20-year period, all Caribbean businesses reported access to credit as a barrier. But the IDB also found that women-owned, and women-led businesses face greater constraints.
Over the past 20 years, women-owned business in the region accessed 20 per cent of the medium-term credit deployed to firms. But, for long-term loans from banks, only 1.3 per cent of the volume of loans went to women-owned firms.
In most Caribbean countries, Dohnert said that more than half of women-owned businesses cite financial costs as a severe constraint to growth.
Commenting on the low volume of credit given to women for medium- and long-term credit, the Compete Caribbean head added that the region’s banks needed to be recultured.
“All else being equal, research shows that women face stricter conditions for credit access,” Dohnert said.