LONDON (Reuters) – Major British banks have committed to narrowing the gap in funding between female and male entrepreneurs, after a government-commissioned report found a lack of available capital for women was “holding the UK back”.
Only one in three entrepreneurs in Britain is female, the report found, equivalent to over a million “missing” businesses overall.
Bridging this gap could create up to 250 billion pounds of value for the UK economy, the report added.
Royal Bank of Scotland (RBS) and Lloyds are among the first lenders to pledge action, including publishing data on the investment disparity between female and male-led businesses under a new voluntary code launched by the government.
The report was authored by Alison Rose, deputy chief executive of NatWest, the largest unit of RBS, and published to coincide with International Women’s Day.
“Targeted intervention really does make a difference, it has a massive impact,” Rose told Reuters.
“What I’ve tried to do is identify barriers and then look at what targeted intervention can do to frankly unlock all this potential we have sitting here in the UK.”
Only 6 percent of women in Britain run their own businesses compared with 15 percent in Canada, almost 11 percent in the United States and more than 9 percent in Australia and the Netherlands, the report found.
Rose identified low access to funding as the biggest barrier for female entrepreneurs, with less than 1 percent of venture capital funding currently going to all-female teams.
Trade bodies UK Finance and UK Business Angels Association have also signed up to the government’s Investing in Female Entrepreneurs Code, which commits financial firms to the principles of gender equality and publishing gender funding data.
Prime minister Theresa May said the report showed more action was needed.
“Alison and her team set out an ambitious path to break this glass ceiling so that we can realise the full potential of female entrepreneurs and boost economic growth,” May said.
Rose said NatWest had seen a significant response to a 150 million pound fund launched last year targeted at female-led business, with a 10 percent increase in investment in female entrepreneurs and an almost 20 percent increase in business accounts opened by women.
RBS’s private bank Coutts is working with wealthy clients to set up a further fund.
(Reporting by Iain Withers; Editing by Mark Potter)