Jess Phillips,
Senior Manager for Wales,
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On this year’s International Women’s Day, Jess Phillips, Senior Manager for Wales at the British Business Bank, reflects on issues of equality and equity within small business finance markets, and the position of women within entrepreneurial ecosystems.
There’s certainly no denying that many female entrepreneurs have a fundamentally different experience to those who are male. For example, our own Equity Tracker Report last year noted that for every £1 of equity investment in the UK in 2021, all-female founder teams received 2p, all-male founder teams received 84p, and mixed-gender teams 14p
But why is this experience so different? At the core of it are the historical disparities in the way women are able to function within the workplace, with potentially more limited opportunities to accumulate human capital in the workforce and higher levels of part-time working, and caring roles, all of these factors can unbalance the entrepreneurial playing field for women. And all are factors within the gender equity debate.
This year the theme of International Women’s Day is ‘Embrace Equity.’ For me equity is the means by which we reach equality, recognising that interventions are necessary to ensure we are given the same opportunities.
So, what is the British Business Bank doing to help level the playing field?
From the top down the Bank is a partner in the Treasury led ‘Investing in Women Code’, which provides a commitment to support the advancement of women entrepreneurs in the UK by improving their access to the tools, resources and finance they need to achieve their goals. The Code looks to entrench its values of gender equity and equality in all organisations that finance entrepreneurs and the Bank will continue to work with investors, fund managers, UK Business Angels Association, UK Finance and HM Treasury to increase transparency in this arena.
When it comes to funding start-ups the Bank’s Start Up Loans programme has an excellent track record in financing female led start-ups. In January Start Up Loans announced that they have facilitated over 100,000 loans worth more than £941 million to businesses throughout the UK since launching in 2012. And of the 4,461 loans received in Wales worth more than £44 million, 37% have been to women. This demonstrates how at both the UK wide, and the Wales level, the number of women receiving Start Up Loans significantly exceeds the percentage of women run businesses in the UK, which lies at around 20%.
However, it’s in the investment space that the picture is less positive, albeit it’s improving, slowly. Of course, any woman who runs a business that is looking for finance, is likely to be acutely aware of the enormous disparities in the proportion of equity deals and investment delivered to female founded businesses and it is only through systemic change that such disparities will be addressed.
British Business Bank is operating in this arena by partnering with, signposting to and supporting many of the female focused finance organisations in the communities in which we operate. In Wales this means signposting to initiatives like AccelerateHer, which aims to facilitate an environment where female founders can scale companies and access investment; joining the new South Wales Women in Banking & Finance Network, which launched its south Wales chapter in February 2023; and supporting Women Angels of Wales, the newly launched women-led business angel investment syndicate designed to support women in the early-stage investment community that has been facilitated by the Development Bank of Wales and Angels Invest Wales.
I’m also a member of the NatWest inclusion taskforce, whose goal is to work towards creating a ‘pathway’ of support, making it easier for women to navigate the options. The goal is for women to be able to connect with any one of the participating organisations and feel confident that she will be signposted to the most relevant organisation or programme, no matter where she is in her entrepreneurial journey.
All of this activity is conducted, in line with the British Business Bank’s wider core objective: to increase, and diversify, the supply of finance available to smaller businesses where markets don’t work well. And in the case of financing female led businesses it’s fair to say that the current market is not working well enough.
However, there is a roadmap to address gender equity and if followed, we can reach true equality when it comes to small business finance. We may be some way off it at present, but it has certainly entered the conversations I have been having in a big way and finance marketplaces are evolving in the right direction.
Jess Phillips is the Senior Manager for Wales at the British Business Bank. She works closely with funding delivery partners, business development agencies and other organisations across the small business finance ecosystem to improve access to financial support. For more: www.british-business-bank.co.uk
