Women and Microlending in Western Europe

This paper presents a survey of micro-lenders who offer micro-loans to women in Western Europe. The paper presents the following context of the survey:

• Women entrepreneurs cite access to finance as the most significant constraint affecting the launch, growth and sustainability of their businesses;
• They run micro-businesses, have few physical assets to offer as collateral for bank-lending and require less money;
• Micro-lenders step-in by providing micro-loans, alternative collateral arrangements, and flexible repayment plans.

The survey:

• Collected data from a representative sample of thirty micro-lenders;
• Examined the possible barriers affecting women's participation in micro-loans programs in western Europe;
• Collected information on micro-lender policy and practice regarding women entrepreneurs.

The survey results indicated that:

• Micro-lending has great potential to meet women's financing needs;
• A combination of demand-side and supply-side factors is resulting in a lower lending rate in Western Europe than observed elsewhere. These factors include:
  • Women's aversion to risk;
  • High levels of income in the country, leading to low levels of necessity-entrepreneurship;
  • Government welfare programs.
• There is a need for technical assistance and assistance in business planning and management;
• There is a gap between program design and awareness of actual need;
• Most women in microfinance play support roles - the lack of women in decision-making positions may influence the level of attention given to supporting women's entrepreneurship.