Theresa May, the British home secretary, recently acknowledged that the UK would benefit from an additional 150,000 start-ups each year if women could launch businesses at the same rate as men.
The trouble is, they can’t. Start-ups need finance and banks treat women entrepreneurs less favourably than they do men. In my report, “How Banks Treat Women Customers”, I show that across Europe businesswomen are less able to access loans from banks than businessmen. Male entrepreneurs in Europe are 5 per cent more likely to successfully get a loan for their business from banks than women. Those women that do gain access to loans in Europe are often subjected to higher interest rates – an average 0.5 per cent more on a business loan than men – or must accept more burdensome guarantees and collateral requirements.
This is not just a case of the market cleverly weeding out the good from the bad. Women are not given worse terms because their businesses are more risky, smaller or in less attractive industries than men. The many studies I looked at explicitly compared like for like. It is not that women are worse at business than men and so present worse credit risks – the average venture-backed technology company run by a woman is started with a third less capital yet has annual revenues that are 12 per cent higher than those run by men.