Evidence shows that women-led SMEs are still far less likely to export than men, with systemic barriers limiting access to finance and time available to dedicate to this aspect of their businesses.
The Organization of Women in International Trade UK (OWIT UK) convened experts from industry, finance and tech on Tuesday (8 April) to discuss how digital and finance solutions can support more women to trade.
‘Systematic discrimination’
Isabell Moessler, the founder and CEO of IMC Consulting, set out data revealing concerning trends in funding for female-led firms.
Highlighting that “systematic discrimination” still lies at the heart of barriers to finance, she quoted research showing that women-led SMEs are 2.5% more likely to have a loan rejected, even when presenting a business plan containing similar metrics to their male counterparts.
Moessler added that, ironically, this bias is costing investors better opportunities, with women frequently asking for “right-sized” investment, proportionate to their needs, which she said indicated “strong capital efficiency”:
“As an investor you should welcome that, rather than someone getting as much money as they can without a solid plan on how to deploy it”.
Reinforcing the idea that this more conservative mindset should be considered an asset, she highlighted data that showed female-led businesses tend to be more resilient during economic downturns.
Practical challenges
Grace Thompson, the Chartered Institute of Export and International Trade’s UK public affairs lead, dug deeper into the practical challenges women reported facing when it came to trade.
In addition to accessing financing, research carried out by the organisation and the Social Market Foundation, found that time was also an issue, with 39% of senior decision-makers in SMEs reporting that “struggling to balance family obligations had affected their ability to succeed”.
Thompson said this showed the importance of “flexibility” in tools and support for female business leaders, with digital solutions a great way to provide this.
She added that the Chartered Institute had responded to this call for greater flexibility, by “converting our courses to e-learning so that they can be completed more easily, at the convenience of learners”.
The Chartered Institute will also be conducting more research into the digital tools that have made a different to female-led SMEs. To get involved, make your interest known at: publicaffairs@export.org.uk.
Tariff threat
Thompson added that insight into this support was more vital than ever amid the challenges posed by US tariffs. Many female entrepreneurs would be “hit earlier” by the Trump administration’s decision to rescind World Trade Organization (WTO) funding last month, she said.
She also noted that “women as consumers” are impacted, and said more information was needed on whether the so-called “pink tax” – higher premiums on products more commonly purchased by women – would extend to import taxes.
She noted additional Chartered Institute support in this area, with resources available through the organisation’s US Tariff Hub and an upcoming Women in Exports roundtable this month, a forum for female businessowners to share how tariffs have affected their businesses with government and industry leaders.
‘Digital-first’ benefits
Revolut’s government affairs and policy manager, Renuka Rawlins, also said that throughout her career in finance, when speaking to female business owners “flexibility was the main thing I heard time and time again”.
She urged them to consider “digital-first providers”, like Revolut, which are able to offer a range of banking products and services “at the touch of a smartphone”.
She added that being “digital-first” eliminates physical branch fees and the higher transaction costs they create, describing them as able to “leverage tech to offer lower costs and more efficient banking services”.
Crucially for trade, this extends to foreign exchange (forex). Taking Revolut as an example, she says the bank enables users to exchange and send money in 36 currencies, often at cheaper rates than mainstream lenders.
She said that these “cost-effective” trade measures can be especially valuable to SMEs as they focus on growth.
Fairer assessments
Reflecting on the discrimination faced by women seeking investment, Rawlins said Fintech firms can also play a role in “levelling the playing field” for women-led businesses. However, in order to create a “supportive, more inclusive lending system” they need to leverage digital tech to remove “systematic barriers”, not just lower costs.
In practice, this involves moving towards “data-driven, transparent methods to evaluate funding applications” to overcome the biases found in traditional lending.
This point was picked up on by Moessler, who said that AI presents many opportunities in the regard:
“AI-algorithmic lending spaces, AI-powered credit scoring, [using] historical measures and transactional data, and training models not to have a gender bias.”
In another high-tech flourish, she also suggested there are more obscure ways of leveraging tech to overcome lending biases, including “tokenising your IP and using it for loans” – a new innovation that she said could help smaller firms with less tangible assets when seeking funding.
UKEF
UK Export Finance’s (UKEF) regional head of export finance managers for the Midlands, Wales and South West, Marie Hall, said that the agency should also be a point of consideration for small, female-led SMEs struggling to access finance.
She explained that UKEF offers an 80% guarantee on export finance loans offered by partners including Barclays, HSBC, Lloyds, Santander, NatWest and Virgin Money. This figure reaches a 95% guarantee for credit insurance.
Hall added that “we don’t compete with the private market, we’re there to complement what they do”. The guarantee is designed to minimise risks for banks lending to smaller businesses:
“If your bank can’t get comfortable with lending to you, your balance sheet isn’t as strong as it could be, that’s when [they] can bring us in”.
NatWest’s head of trade finance sales for London and the South, Jatin Lealh, supported this, highlighting how UKEF support had helped the bank boost its export finance support for female-led SME’s 200% on the previous year.
Hall added that there’s more to come, with UKEF making support for women-led SME one of its five strategic missions for the next five years, with the aim of increasing the number of women-led SMEs the agency supported from the 18% recorded last year.
Tailored support
Yvonne Greeves, NatWest’s director of women in business, highlighted that there’s also a dedicated programme to support women at the bank.
Across the UK, the programme has over 1000 women-in-business specialists, Greeves describes as there “to support women entrepreneurs to be able to scale and grow their business”.
She adds that the bank has 12 regional “accelerator hubs” across the company, which also has targets to up its business support to a 50/50 gender split. The bank also recently launched NatWest Accelerator, a community platform in which women in business can support one another and share resources:
“It’s really about bringing a community together to start talking about, and sharing, knowledge, as well as opportunities”.
