Women and Microlending in Western Europe

What are the constraints to micro lending for women in Western Europe?
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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.

About this Publication

By Underwood, T.