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In recent years, there has been a notable surge in efforts to empower women in finance, technology, and entrepreneurship. By most measures, women are making steady gains in professional opportunity, pay, status, and decision-making power at work.
Their progress, while uneven, is reflected in economic empowerment indexes put out by the OECD, World Health Organization, UN agencies, and others. According to WHO, the Gender Inequality Index (GII) is a key metric that evaluates disparities in three dimensions: reproductive health, empowerment, and the labour market.
Similarly, the United Nations Development Programme (UNDP) provides valuable insights through its Human Development Reports, shedding light on global trends in gender equality and economic empowerment.
Picture this; a world where women entrepreneurs receive equitable access to venture capital funding, where their innovative ideas are met with enthusiasm and support, and where gender biases are relics of the past. It's an inspiring vision, but reality paints a starkly different picture.
In today's landscape, investing in women founders has never been more consequential. With the rise of female empowerment in the GCC, women are at the forefront of innovation, driving meaningful change across diverse industries. Yet, women business founders continue to face formidable barriers in accessing the funding needed to bring their visions to life.
Consider this staggering statistic: women receive a mere 2.3 per cent of global venture capital funding, with Arab women capturing a negligible 0.1 per cent of this portion. This glaring funding gap underscores the urgent need for systemic change to level the playing field for female entrepreneurs.
So, why do women receive less funding than their male counterparts? The reasons are as complex as they are entrenched, stemming from deep-rooted gender biases that permeate every facet of society.
Gender bias starts early
Societal expectations shape how girls and boys are taught to communicate, behave, and aspire. These differences persist well into adulthood, permeating professional environments where women's contributions are often undervalued and overlooked.
Consider the stark reality faced by female founders in the world of venture capital. Male-dominated investment teams tend to favour male-led startups, perpetuating a cycle of gender bias that stifles innovation and limits opportunities for women.
Women still bear the burden
Despite significant strides towards gender equality, women continue to shoulder the lion's share of family and caregiving responsibilities. According to World Bank stats, mothers aged 20-44 spend five hours more per day than their partners on household and family care activities. For women entrepreneurs, these care-giving responsibilities present formidable obstacles, limiting their ability to dedicate themselves fully to their ventures.
The lack of affordable childcare further compounds these challenges, particularly for women entering entrepreneurship later in life.
Fear of failure - and borrowing
Women entrepreneurs grapple with heightened fears of failure and reluctance to borrow funds, citing concerns about financial risk and lack of access to support networks. According to the Policy Brief on Women’s Entrepreneurship, compiled by the EC and OECD, 52 per cent of women express worries about failing to start a business, compared to 42 per cent of men.
Additionally, women often face barriers in accessing startup training courses and borrowing funds, further exacerbating their challenges in navigating the entrepreneurial landscape.
Entrepreneurial role models
Representation matters. Yet, in the realm of entrepreneurship, female role models remain sorely lacking, particularly in mainstream media portrayals. The absence of visible female leaders perpetuates a masculine bias that marginalises women in the business landscape.
To counter this trend, it is imperative to elevate and celebrate female entrepreneurial role models, inspiring the next generation of women leaders and challenging prevailing gender stereotypes.
Necessity vs opportunity entrepreneurship
Women entrepreneurs are more likely to engage in necessity-driven entrepreneurship, propelled by socio-economic constraints rather than genuine opportunity. This distinction is particularly pronounced in developing countries, where women face systemic barriers to economic empowerment.
Recognising and addressing these systemic inequities is essential to fostering an ecosystem that supports and empowers women-led businesses.
Despite these challenges, women-led startups offer unique advantages in terms of job creation and return on investment. According to research by BCG, businesses founded by women deliver higher returns on investment and create more job opportunities than their male-led counterparts.
These findings underscore the untapped potential of female entrepreneurship and the imperative of investing in women founders to drive sustainable economic growth.
As we look to the future of fintech and entrepreneurship, it is incumbent upon us to dismantle systemic barriers and create an inclusive ecosystem that empowers women to thrive. By challenging gender biases, fostering mentorship opportunities, and investing in female-led startups, we can unlock the full potential of women in fintech and drive meaningful change in the global business landscape.
