While many women have broken through stereotypes to change the way we think about gender and finance, barriers still remain, and it’s time to give the next generation of businesswomen the tools that they need to succeed in the business world.
According to the State of Women-Owned Businesses Report, commissioned by American Express, there are now almost 13 million women-owned businesses in the US compared to the1970s, when there were less than 500,000 across the country. This represents an increase of 3000%.
In fact, according to a recent study conducted by Biz2Credit, in 2019 alone there was an average of 2,000 women-owned businesses being launched every day. What is more, 64% of those businesses corresponds to women of color. From 2018 to 2019 the average revenue of women-owned businesses rose by 68%, from $228,578 to $384,359.
Despite these significant advances, there is still a long road ahead before there is true gender equality in the credit market. The study from Biz2Credit also mentions that the average loan size for women-owned businesses was 31% less than that for male-owned businesses.
Because of the pervasive gender inequality in this country, women-owned businesses tend to be less mature, and therefore have less credit history, which in turn makes it more difficult for those businesses to have access to capital from institutional lenders. According to a research almost 70% of women entrepreneurs who seek business funding are denied, contributing to the inequality cycle. It is clear that equality for women in the credit market is imperative.
A Miami based digital specialist lender called JIG Solution founded by Italo Bastidas and Gonzalo Zabala, two MBA entrepreneurs from Babson College in Wellesley MA. JIG Solution provides flexible and easy funding to small businesses and entrepreneurs
through different financial vehicles. The company is actively trying to close the gender gap by supporting businesswomen financially.
They are not only aware of these trends, but convinced that there is a tremendous opportunity in building strong relationship with women entrepreneurs.
“In our experience none of our female clients have ever missed a loan repayment or have even been delayed in their installments. This is why our business strategy is focused on growing our customer base, mainly with women-owned businesses and at the same time helping them develop their companies. Our priority is to maintain a low risk on payment defaults and grow the client portfolio organically hand-in-hand with clients, creating long- lasting relationships”, commented one of its founders.
It is clear that women are raising their hands and creating new businesses every day, however they are not getting the support they need from financial institutions, which makes it harder for them to grow their business. There are few institutions currently that have the mission to help women entrepreneurs and help close the gender gap in the credit market.
In conclusion, there are many successful women entrepreneurs with brilliant ideas out there who constantly struggle to get funding. Hence, many of them fail trying. JIG is one of the few players who are committed to support women-owned businesses all the way, and these young entrepreneurs are seeking to work with potential clients by implementing social values through technology and finance.