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AbstractBusiness women and their companies, powerful drivers of international economic devel-opment, are characterised by certain idiosyncrasies. The present study aimed to analyse the effect of financial support for female entrepreneurship on the number and character-istics of such endeavours. Data for 2005-2012 drawn from the database of new company projects financed by AVALMADRID SGR were analysed with univariate and bivariate methods. The findings revealed differences between female and male entrepreneurship and showed that women’s business activities are more intense when specific support is available from financial institutions.

Keywords: Women, entrepreneurship, financing, Spanish Mutual Guarantee Institutions (SGR), Guarantee Scheme, regression model, SMEs.

JEL codes: L26, G32, C25.

Esic Market Economics and Business JournalVol. 45, Issue 3, September-December 2014, 515-532

Implications of financial institution support for women’s business projects

Concepción de la Fuente-Cabrero, Mónica Segovia-Pérez and Cristina Figueroa-Domecq*

Universidad Rey Juan Carlos

* Corresponding author. Email: [email protected]

ISSN 0212-1867 / e-ISSN 1989-3558© ESIC Editorial, ESIC Business & Marketing SchoolDOI: 10.7200/esicm.149.0453.3ihttp://www.esic.edu/esicmarket

1. Introduction

Today’s marketplace is in need of generous doses of change, innovation and adap-tation. New company creation and operation are instrumental to economic develop-ment, job creation, innovation and competitiveness (Acs et al., 2006; García et al., 2010). National and international studies conducted on newly founded companies have shown that despite recent growth, a smaller proportion of women than men

516 Concepción de la Fuente-Cabrero et al.

workers are self-employed (Brush et al., 2009; Álvarez and Otero, 2007). Nonethe-less, companies founded by women have become a significant driver of international economic development (Xiong, Fu, Zhang, Zhang, Xiong, 2011).

According to the GEM 2012 report (Hernandez-Mogollón et al., 2013) in 2012 four per cent of the female population were entrepreneurs, with absolute values down by 11.9 % over 2011, whereas male entrepreneurs accounted for 7.36 % of the total, with absolute numbers up by 4.4 %. Consequently, for every woman starting up in business, there are nearly two men (female/male ratio = 0.54). That same report showed that financing is one of the major determinants in the magnitude and characteristics of business activity, so the additional obstacles to raising capital imposed by the present financial crisis condition entrepreneurship. The mean amount of starting capital in new businesses has declined significantly, while the proportion of informal investment as a source of support has grown gradually since the onset of the crisis. Access to financing for business projects, in turn, has attracted a good deal of attention in national and international organisations as well as in research circles in recent years (Roper and Scott, 2009; Sánchez Escobedo, M.C., Jiménez Postigo, M. V., Díaz Casero, J. C., y Hernández Mogollón, R., 2012).

For female entrepreneurship, whose idiosyncrasies and problems (Klapper and Parker, 2010) distinguish it from male-run businesses, financing is a significant item. A number of studies have shown that the financial models chosen by businesswomen and men differ (Hernandez-Mogollón et al., 2013; Brush, Carter, Greene, Gatewood and Hart, 2001; Coleman, 2000), although other authors have reported that these differences are narrowing (Carter, Shaw, Lam and Wilson, 2007). The question is whether these differences are attributable to discrimination against women or whether the smaller sums on their loan applications stem from their own traits or the characteristics of their start-ups. Another key factor that should be addressed is whether financial institution support for men and especially for women is a determi-nant in their decisions to undertake a project.

Given the importance of female entrepreneurship for sustainable economic development and the differential characteristics of such endeavours, particularly as regards financing, the present paper aims to identify the impact of the measures that support businesswomen by enhancing their access to financing for their projects. More specifically, a case study is conducted of a programme designed to finance women entrepreneurs, implemented by a mutual guarantee company (Spanish initials, SGR) operating in the region of Madrid, namely AVALMADRID SGR1. In 2005 this SGR created a specific department to foster female entrepreneurship, which was in place for 3 years, through 2007 (further information on this initiative can be found in Figueroa-Domecq, De la Fuente-Cabrero and Segovia-Pérez, 2011).

The present study analyses the effect of this support on female entrepreneurship measured as the number of projects financed and the amount of funding provided.

(1) AVALMADRID’s primary corporate purpose is to afford SMEs operating in the region of Ma-drid readier access to financing in the form of secured long-term loans.

Implications of financial institution support for women’s business projects 517

The study is divided into four parts. The review of the literature following this introduction positions the present research within the realm of financing and entre-preneurship and aligns its objective with international studies conducted in the area. The review culminates with a number of working hypotheses. The methodology applied is described and the results discussed. Lastly, conclusions are drawn and their implications for institutional support for female entrepreneurship addressed.

2. Literature review

The variables that explain the growing interest in entrepreneurship also deter-mine the reasons why women have a lesser presence in business than men and gender-based differences in financing. All the models analysed revolve around entrepreneurs’ personal traits and the characteristics of the business environment. As the two are directly related, assessment of entrepreneurship should attempt to address the complex system of inter-relations involved (Brush et al., 2009; Bourne, 2009).

All the papers analysed (Navarro et al. 2010; Hughes, 2003; Álvarez and Otero, 2007; Brusch et al., 2009; Pinillos, 2010; Bourne, 2009; Moriano, 2005; García et al., 2010) relate business activity to economic, social, political, financial and leg-islative factors; entrepreneurs’ personal or demographic traits, including sex, age, education, human capital, social capital, social networks and employment status; and cognitive factors such as self-confidence, identification of opportunities and tol-erance to risk. Consequently, entrepreneurship is a multi-dimensional aptitude that embraces a broad range of disciplines; economics, psychology and sociology among them (Gartner, 1990 in García et al., 2010).

Of particular interest in this regard is the 5-M model developed by Brusch et al. (2009), which adds two important items to the Bates et al. (2007) 3-M model (market, money and management), i.e., motherhood (family structure) and the meso/macro environment (economic, political and social support for women). Capital restraints, which lie within the domain of one of the 5 Ms (money), are among the factors ordinarily identified as determinants for opening a business (Dunn and Holtz- Eakin, 2000; Johansson, 2000; Blanchflower and Oswald, 1998). The ration-ale is that some individuals who wish to set up a business of their own are unable to for want of the financial wherewithal. Consequently, when credit is looser, the likelihood of self-employment would be expected to be higher.

According to the traditional line of thought, women have lesser access to formal financing. The gender gap in this regard depends on a country’s legal framework, culture and the socio-economic and professional status of women on the whole. In most societies, women’s access to the working world has lagged or continues to lag behind men’s, limiting the resources at their avail in general. Things are chang-ing rapidly, however, and progress is being made in the establishment of specific channels to help businesswomen and ensure their equal treatment by financial


institutions. Women’s limited resources and hence their inability to provide security may be more of a determinant in being approved for loans than their sex (Navarro et al., 2010).

Research has traditionally regarded women to be the object of discrimination or unequal treatment by financial institutions, presumably due to an outdated vision of gender roles (Buttner and Rosen, 1989; Goffee and Scase, 1983). According to more recent literature on gender and financing, however, financial entities do not appear to discriminate directly against women (Buttner and Rosen, 1988), although women invariably have scanter access to outside financing than men (Navarro et al., 2010). The papers analysed not only identified greater difficulties for women than men to obtain financing, but also differences in the total sum financed. Some studies showed that women themselves tend to apply for personal loans due to their businesses’ smaller capital needs, their reluctance to resort to outside financing (Wil-liams and K’nlfe, 2012) and a lack of confidence in the likelihood of approval of their loan applications (Roper and Scott, 2009). According to the respective GEM report (2009), in 2008 33.9 % of women applied for outside financing, compared to 36.5 % of men. More men (74.7 %) than women (65.8 %) resorted to bank loans, while more women sought financing from family and friends (14 % compared to 11.2 % in men).

The question, then, is whether such limited access to financing is due to financial institution discrimination or to the characteristics of businesswomen’s loan appli-cations. Several studies have shown that male personality traits are more directly related to successful entrepreneurship (Buttner and Rosen, 1988). This has an impact on financial institutions and on businesswomen’s own self-perception.

Some authors have reported that men’s loans are for larger amounts than wom-en’s (Agier and Szafarz, 2012), while micro-lending institutions, which loan small sums to businesspeople with limited means, tend to have more women on their loan books. One of the characteristics that differentiate micro-lenders is their flexibility, drawing from social capital (generating social networks) as alternative security for loans, given their special impact on women (Estapé-Dubreuil and Torreguitart-Mi-rada, 2010).

Moreover, women’s personal and professional traits affect how their loans are applied for and obtained. The variables identified in the literature in this regard, which impact women directly, include: security, which may be more difficult to marshal for women than for men, in light of their limited access to executive posi-tions and the wage discrimination to which they are subject; business experience and social capital, i.e., connections, which are narrower among women than men; gender; ethnic group; and lastly, civil status and whether or not they have children (Sena, Scott and Roper, 2012).

A survey conducted by Navarro et al. (2010) revealed two possible reasons for women’s reluctance to apply for loans. Firstly, 13.1 % of women, compared to just 8.8 % of men, felt that their application would be rejected. In addition, more busi-nesswomen than men preferred to have no debts to exert tighter control over their


business. These findings concurred with other authors’ reports (Greene et al., 2003; Xiong et al., 2011) to the effect that businessmen are more prone to resort to debt than businesswomen.

One substantial obstacle to financing is a woman’s prior business experience (Navarro et al., 2000; Xiang et al., 2011) and personal wealth: i.e., her ability to secure a loan. Women’s limited access to executive positions has an adverse effect not only on their personal wealth, but also on their ability to network, limiting endorsement of their professional aptitudes and consequently of their ability to access outside financing.

Social capital therefore constitutes an item of particular interest when seeking financing. Xiong et al. (2011) identified networking as a determinant in obtaining loans from financial institutions, which were also observed to prefer to finance companies with which they had had previous dealings. Women are at a disad-vantage in this respect, for their connections tend to be less diversified and to exclude contacts with financial institutions (Renzulli, Aldrich and Moody, 2000). Actually, according to Xiong et al. (2011), collaboration among women in coop-erative groups may further entrepreneurship among them, improving their access to financial institutions.

As indicated earlier, women’s perception of their success in floating a loan is an important consideration. In a study conducted in England, Roper and Scott (2009) showed that 7.4 % of businesswomen had a pessimistic perception of the possibility of accessing financing for their endeavours. That had a significantly adverse effect on their loan applications. The same study concluded that women’s confidence in their ability to obtain outside financing depends more on their educational level than on prior professional experience. Women with university training felt more confident about the likelihood of loan approvals than women with lower educational levels (Sena, Scott and Roper, 2012).

These authors also found that women appear to be more risk-averse and to apply for less outside financing than men. That finding varied, however, when the female population was broken down by personal traits, an approach that confirmed the close relationship between university training and outside financing. The Sena, Scott and Roper (2012) study concluded that one of the major limitations to female entrepreneurship is women’s perception about the scant accessibility of outside financing. Furthermore, they observed that women who had obtained some manner of institutional support were more prone to go into business for themselves, when the support was adapted to their circumstances. Policies fostering entrepreneurship must be based on companies’ financial conduct, as well as on their size (Williams and K’nIfe, 2012). Since, as noted earlier, women are more risk-averse and prefer single partner companies as opposed to limited or joint stock companies, the development of financial products specifically designed for such organisations may be an effective course of action.

The findings of another study conducted in the United Kingdom on loans grant-ed by financial institutions to businesswomen and men are also revealing. Authored


by Carter et al. (2007), it concluded that while the approval process for women’s loans focused on the business itself, where men were involved, the institutions required more information on the company’s financial history and the applicants’ personal traits. Implicitly, then, banks establish gender differences when assessing loan applications: women are required to provide more information on the business to be undertaken while men are judged more on their integrity and professional capacity.

Consequently, women’s ability to obtain loans is limited less by banks than by their own negative perception about the accessibility of outside financing. In light of that finding, to further female entrepreneurship, financial institutions should design specific programmes for women, adapted to their financial needs.

SGRs are financial institutions that focus on fostering SMEs’ access to financing. These companies find it more difficult than large firms to obtain bank loans, par-ticularly long-term loans. The reasons are the lack of security, their scant bargaining power with financial intermediaries and the problems stemming from supply-and demand-side information asymmetries (for an exhaustive review of Guarantees Schemes coordinated by SGRs in Spain in particular, see De la Fuente-Cabrero, 2007).

Based on data furnished by the Businesswomen’s Department created by AVAL-MADRID SGR for the region of Madrid and a review of the literature, which reveal the importance of supporting women’s entrepreneurship, the present study explored the following hypotheses.

H0. Entrepreneurship benefits from the existence of subsidies or support instruments.

H01. Male entrepreneurship benefits from the existence of subsidies or support instruments:H011. measured as the number of start-up company projects that obtain

financing;H012. measured as mean funding per male project.

H02. Female entrepreneurship benefits from the existence of a women’s depart-ment in a SGR or of subsidies:H021. measured as the number of loans granted for women’s start-up com-

pany projects;H022. measured as the mean funding per female project.

3. Methodology

The choice of AVALMADRID as the object of the analysis of business finance in the region of Madrid was based, firstly, on the significance of this SGR both in the mutual guarantee sector and in the region of Madrid; and secondly, on the fact that during part of the period studied it had a Businesswomen’s Department in place to support female entrepreneurship.


AVALMADRID SGR has been operating in Madrid since 1985. By year-end 2012 it had backed 13 191 companies, formalising 39 849 guarantees for loans worth a total of 1.61 billion euros. It has taken part in the founding of 4 247 companies, together accounting for 32 % of the total (AVALMADRID, 2013; CES-GAR, 2013). In recent years the institution has furthered entrepreneurship through joint programmes with the Autonomous Region of Madrid in which funds were specifically earmarked to finance women’s new business projects. In keeping with that aim, it created a Businesswomen’s Department to foster suitable financing for women’s companies and furnish them with all the counsel required. The crea-tion of this department was driven by an industry shortcoming: the insufficient or non-existent access to financing for business projects headed by women. During its three-year tenure, the department approached, collaborated with and distributed information among a number of women’s associations, as well as institutions and universities (including the Women’s World Bank, the Spanish union of associations of self-employed workers and businesspeople (UATAE), the Spanish association of businesswomen (ASEME) and the women’s foundation (Fundación Mujeres). As discussed in the sections below, its activity had a very beneficial effect on female entrepreneurship. For a descriptive analysis about female entrepreneurship projects distribution in which AVALMADRID SGR participated in the period 2006-2010 (Figueroa-Domecq, De la Fuente-Cabrero and Segovia-Pérez, 2011).

The present research drew from the AVALMADRID SGR database on business start-up projects financed by the institution in 2005-2012. The first sampling criteri-on, however, was to limit the analysis to the period 2005-2010. While the inclusion of a series of years following the discontinuation of the Businesswomen’s Depart-ment in 2007 was deemed essential, an analysis of the activity in such years, both in the industry as a whole and in AVALMADRID SGR in particular, revealed the existence of two clearly distinct periods. In 2008-2010, the intensity of activity in the industry held steady or even rose, despite a slight decline in 2008 with the onset of the financial crisis, which froze credit flows to companies for a few weeks.

In 2011 and 2012, however, crisis-specific behaviour was recorded, which dif-fered widely from the patterns observed in the preceding years. These two years were consequently excluded from the analysis to avoid distortions in the longitudinal analysis. The initial universe of 3 853 business projects in 2005-2012 was therefore reduced to the 2 831 or 73 % undertaken in 2005-2010.

The database of projects financed by AVALMADRID SGR included informa-tion on applicant gender, year of application and approval, sum applied for and funding approved, duration of guarantee in months and company line of business (national business code), among others. A preliminary analysis was conducted of the data to reject any atypical or outlying values, further to the generally accepted rule that excludes values at 3 to 5 s of the mean standard error. New summary variables (total value of loans and number of projects) were created from the raw data to analyse the relationships between variables in depth and build year-on-year indicators.


The study began with an overview of the security furnished for business loans in 2005-2010, which constituted the grounds for the first univariate analysis (frequen-cy distribution, measures of central tendency and scatter). Bivariate analyses were conducted to determine possible gender associations in the effect of instruments designed to support entrepreneurship on business activity. The contingency tables used to that end contained statistics showing the degree and strength of the asso-ciation between variables from which to verify the working hypotheses. Wherever samples proved to be large enough, analyses based on percentage differences were conducted, and the differences in the residuals were corrected. The bivariate method used was Pearson’s linear correlation coefficient, which quantifies the relationship between two variables and yields the p-value for comparison to the null correlation coefficient. Segmented linear regression was used for the multivariate analyses, breaking the database down by gender and taking the number of projects per year as the dependent variable and the year of approval as the sole explanatory variable. The significance of the parameters estimated and model goodness of fit were the items considered in these analyses.

4. Results

AVALMADRID SGR approved a total of 2 831 business projects in 2005-2010. As Table 1 shows (both sexes column), the number of projects grew steadily throughout the period, with the exception of a slight dip in 2008. The most common types of business conducted by the beneficiaries in the period studied were retailing (29 %) and general services (26 %), and the least, manufacturing (4 %) and hair styling (7 %).

Of the total of 2 831 business projects approved in 2005-2010, 751 or 27 % were submitted by women. The total sum financed for businesswomen’s projects was 26 640 811 euros (17 % of the total).

As Table 1 shows, the number of projects approved by AVALMADRID SGR in the period followed different patterns in men and women. In men, growth was steady throughout the cycle, barring a decline in 2008 followed by full recovery in 2009 and 2010. No clear trend could be identified for the data on women. Growth was expo-nential in the early years, rising 193 % from 2005 to 2006 and steeply in 2007 as well. The values for 2008 and 2009 declined very sharply, however, by 54 % compared to the mere 5per cent slip among men in the former year. In 2010, the figure for women rebounded by 78 % over the two preceding years. As noted earlier, the AVALMADRID SGR Businesswomen’s Department was operational in 2005-2007, the years exhibiting the steepest growth in the number of women’s projects financed. The effects were felt after the first year, in 2006 and 2007, particularly in the former, when the number rose by 193 %, as noted above. In 2010, in turn, a special programme to support entrepre-neurship was implemented by the central Government. While the number of projects financed in that year rose for men and women alike, the rise was much steeper for the latter, with an upturn of 78 % compared to 20 % for men.

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The analysis of the sum financed revealed similar patterns. The correlation between the two variables (for both sexes) was practically perfect and very robust: r was close to one and its positivity was indicative of a direct relationship (see Table 2): i.e., the total sum financed grew with the number of projects. This correlation was also observed in the analyses conducted by gender: the values for men were r=0.981** and p= 0.001; and for women r=0.992** and p=0.000 (see Table 2).

Table 2. Correlations between variables

Total sums financed

Number of proposals approved

Total sums financed

Pearson correlation coeff. 1 0.985**

Bilateral sig. 0.000

N 12 12

Number of proposals approved

Pearson correlation coeff. 0.985** 1

Bilateral sig. 0.000

N 12 12

** Correlation bilaterally significant at 0.01.Source: formulated by the authors.

The correlation equation was as follows for both sexes:

4sum = _ *No. projects

4sum = 0.98 *No. projects

Nonetheless, a detailed study of the sums financed by gender and year (see Table 1) revealed that for men the trend was upward year-on-year except in 2008, when the value dropped both for the amount financed and the number of projects. For women, the sum financed rose in the first two years, when the Businesswomen’s Department was operational, and declined in the following two, after it was dis-continued. The value rose again in 2010, as noted above, with the reappearance of outside support for entrepreneurship. This pattern was logically attributable to the rise in the number of projects.

In light of these data, for women the relationship between the number of projects and the sums financed per the year of approval was neither constant nor linear, sug-gesting that the rise in the number of projects may depend on other factors. Hence, for women, this relationship only held when favoured by an outside stimulus. Other-wise, growth was flat or negative. That conclusion would confirm hypothesis H021, whereby “female entrepreneurship benefits from the existence of a women’s depart-ment in a SGR or of subsidies, measured as the number of loans granted for women’s


start-up company projects”. In short, the female business activity only grows when specific support for entrepreneurship is in place. Given the correlation discussed above between the number of projects financed and the sums involved, hypothesis H022 may also be accepted, to the effect that “female entrepreneurship benefits from the existence of a women’s department in a SGR or of subsidies, measured as the sums granted to finance women’s start-up company projects.”

By way of conclusion, then, of the two initial working hypotheses under H0, “entrepreneurship benefits from the existence of subsidies or support instruments”, i.e., H01, “male entrepreneurship benefits from the existence of subsidies or support instruments” and H02, “female entrepreneurship benefits from the existence of a women’s department in a SGR or of subsidies”, only the latter can be accepted.

These findings concur with the results of studies conducted in countries such as the United Kingdom, where institutional support was observed to be beneficial for female entrepreneurship (Sena, Scott and Roper, 2012; Roper and Scott, 2009).

The number of approvals of men’s and women’s loan applications during the period followed different patterns. The linear regression applied to analyse this behaviour revealed the existence of a linear relationship between the number of operations and time, as per the following equation:

No. of projects financed= - 141 899 + 70.8571*year concluded

The slope of the line indicated that the number of projects financed grew by 70 every year. As Table 3 shows, since the P value for F was under 0.05, the model could be regarded as valid and the relationship between the constant and the estimator (the number of projects and year analysed) as statistically significant, for its P value was under 0.5. The correlation coefficient showed a close relationship between the two variables and according to the corrected R squared, the model explained 91.27 % of the variability.

Table 3. ANOVA

Estimated coefficients P value

Constant -141 899 0.0019

Year concluded 70.8571 0.0019

Goodness of fit measures

F 53.26 0.0019

Correlation coefficient 0.964441

R squared 93.01 percent

Corrected R squared 91.27 percent


Estimated coefficients P value

Standard error of estimate 40.66

Mean absolute error 25.80

Durbin-Watson statistic 3.30 0.9362

Source: formulated by the authors.

Given its P value of over 0.05, the Durbin-Watson (D-W) statistic denoted the absence of serial autocorrelation of residuals at a 95 % confidence level.

In short, regression analysis showed that the relationship between the two vari-ables was constant and linear: the number of projects financed increased year after year irrespective of the existence of subsidies. Men can therefore be said to behave differently than women. In light of this finding, hypothesis H011, according to which “male entrepreneurship benefits from the existence of subsidies or support instru-ments measured as the number of start-up company projects that obtain financing” must be rejected, for their business activity does not depend on that factor.

At the same time, as it was shown, the number of total men’s business projects and the amount of the respective loans are correlated. Consequently, hypothesis H012, namely that “male entrepreneurship benefits from the existence of subsidies or sup-port instruments measured as mean funding per project”, must also be rejected.

In conclusion, then, sub-hypothesis H01, “male entrepreneurship benefits from the existence of subsidies or support instruments” under working hypothesis H0, “entrepreneurship benefits from the existence of subsidies or support instruments”, can be definitively rejected.

Another gender-based difference was found in the mean sum financed, which for women was just over one-half of the mean for men (see Table 1), perhaps because women’s business projects are more geared to self-employment. Further-more, significant gender differences were observed in the type of business conducted (r2=261.262031; gl=8 p)000; cc=0.25; p)000). Further to the value for the correct-ed residuals (over 1.96, an indication of the existence of significant association at 95 % confidence), women tended to engage in retailing and hair styling or beauty consultancy, whereas men’s projects were more commonly related to transport, retailing and restoration (see Table 4). These findings are consistent with earlier lit-erature, which showed that women specialise in sectors associated with lower levels of initial investment and consequently smaller financing needs (Navarro et al., 2010; Xavier de Salas et al., 2013; Williams and K’nlfe, 2012).


Table 4. National business code - gender contingency table

Women Men Total

Agriculture

Abs. number 0 5 5

% of gender 0.0% 0.2% 0.1%

Corrected residuals -1.3 1.3

Manufacturing

Abs. number 30 113 143

% of gender 2.9% 4.0% 3.7%


Construction


% of gender 1.1% 3.6% 2.9%


Retailing

Abs. number 378 719 1097

% of gender 36.9% 25.4% 28.5%

Corrected residuals 7.0 -7.0

Transport


% of gender 3.0% 16.8% 13.1%


Restoration

Abs. number 138 539 677

% of gender 13.5% 19.1% 17.6%


General services

Abs. number 285 713 998

% of gender 27.8% 25.2% 25.9%


Travel agencies


% of gender 1.9% 1.3% 1.5%


Hair styling

Abs. number 132 125 257

% of gender 12.9% 4.4% 6.7%


TotalAbs. number 1024 2827 3851

% of gender 100.0% 100.0% 100.0%

Source: formulated by the authors.


5. Conclusions

As entrepreneurs, women are characterised by specific features and needs. Both the review of the literature and the research conducted in the region of Madrid revealed that women are less prone to entrepreneurship than men and focus on cer-tain types of business. The literature suggests several reasons why outside financing is less accessible to women than men. While financial institution discrimination appears to be highly unlikely in light of recent research, women may apply for fewer and smaller loans than men due to the characteristics of their business projects (with lower capital needs), their reluctance to acquire debt and their greater risk aversion. In addition, they may be confronted with a structural barrier: their limited ability to furnish the security required to obtain a loan. In short, women are less keen on and less confident about financing. Hence, another possibility to be borne in mind is that women’s lesser confidence in their ability to obtain financial resources may underlie their lesser tendency to apply for loans.

The present findings appear to corroborate the conclusions of prior studies (Sena, Scott and Roper, 2012) to the effect that one of the major obstacles to female entre-preneurship is women’s perception that they are unlikely to be able to access outside financing. Ultimately, then, self-confidence and the lack of support for business-women are keys to the issue. In the years in which the financial institution analysed, AVALMADRID SGR, had a Businesswomen’s Department or was able to draw from specific assistance and systematically support female entrepreneurship, women’s business activity rose both by number of projects and sums financed. Such insti-tutional support consequently proved to be beneficial for female entrepreneurship.

Other studies have shown that a substantial barrier to financing women’s busi-ness projects is their inability to furnish the security required by financial institutions (Navarro et al., 2000; Xiang et al., 2011). As an institution engaging primarily in guaranteeing long-term loans for SMEs, AVALMADRID SGR played an essential role in this regard, providing a solution to the problem.

These findings are of cardinal importance in connection with institutional sup-port for female entrepreneurship. The Government should implement measures to foster women’s confidence in their ability to obtain financing, lowering their adverse perceptions in this regard. Policies adapted to women’s differential needs should also be instituted, segment by segment, to support female entrepreneurship. The present findings suggest that measures specifically designed for female entrepreneurship would be beneficial. SGRs would seem to be a suitable vehicle for the implementa-tion of such measures and introducing them to businesswomen.

Lastly, a word is in order on the main limitation to this study, namely that it was confined to the region of Madrid and a SGR operating there. Future research might enlarge this analysis to include other geographies and other SGRs to compare the findings.


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Notes on Contributors

Name: Concepción de la Fuente-CabreroPosition: Vicedecana Ordenación Académica y ProfesoradoSchool / Faculty: Facultad de Ciencias Jurídicas y SocialesUniversity: Universidad Rey Juan CarlosAddress: Paseo Artilleros s/n. 28032 Vicálvaro. MadridTelephone: 91 488 77 28Email: [email protected]

Name: Mónica Segovia-PérezPosition: Coordinadora Académica Grado de SociologíaSchool / Faculty: Facultad de Ciencias Jurídicas y SocialesUniversity: Universidad Rey Juan CarlosAddress: Paseo Artilleros s/n. 28032 Vicálvaro. MadridTelephone: 91 488 80 42Email: [email protected]

Name: Cristina Figueroa-DomecqPosition: Coordinadora Académica Grado de Relaciones InternacionalesSchool / Faculty: Facultad de Ciencias Jurídicas y SocialesUniversity: Universidad Rey Juan CarlosAddress: Paseo Artilleros s/n. 28032 Vicálvaro. MadridTelephone: 91 488 80 42Email: [email protected]

Acknowledgements

The authors would like to acknowledge AVALMADRID SGR for their willingness to provide the needed information to perform this research.The authors are liable for any data mistakes.

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