Banks and other financial institutions will publish a ‘gender split’ on the investments they make as part of a series of initiatives aimed at increasing the number of female entrepreneurs.
The Treasury, working with UK Finance, will establish a new ‘Investing in Female Entrepreneurs’ Code to be published annually. This new code will focus how financial institutions’ funding decisions can have a greater impact on the wider economy. Financial institutions including Lloyds Banking Group, UK Finance and UK Business Angels Association have already confirmed they will adopt the code.
The move is part of a review led by NatWest banker Alison Rose which has set out eight initiatives designed to boost female entrepreneurship.
The UK Government will also improve online information and guidance for all aspiring entrepreneurs and businesses, help develop local businesses mentors for women, and promote entrepreneurship amongst 15-18-year-old girls in schools. It will also support an industry-led task force to drive more funding to female entrepreneurs
It is hoped that these moves will help increase the number of female entrepreneurs in Britain by 50%, after independent research showed women face too many barriers to setting up their own business.
The review has found five key barriers that lead to lower rates of entrepreneurship amongst women:
- Low access and awareness of capital
- Greater risk awareness
- Perceived missing skills & experience
- Disproportionate primary care responsibilities
- Lack of relatable sponsorship/mentorship/role models
Eight initiatives that target different stages of the entrepreneurial journey from start up to scale up have also been identified, and these will have both a direct and indirect impact on female entrepreneurs. These initiatives are:
- Promote greater transparency in UK funding allocation through a new Investing in Female Entrepreneurs Code – A new Investing in Female Entrepreneurs Code to be created which commits all financial institutions to the principles of gender equality and transparent reporting of gender funding data. NatWest will be a founding signature. Lloyds Banking Group, UK Finance and UK Business Angels Association have already confirmed they will adopt the Code.
- Launch new investment vehicles to increase funding going to female entrepreneurs – UK banks and investment funds to commit to encourage their high net worth clients and institutional investors to invest in female businesses. This is being actively explored by Coutts, private banking arm of NatWest, who are in discussions with a number of potential investors.
- Encourage UK based institutional and private investors to further support and invest in female entrepreneurs – Institutional and private investors be encouraged to take steps to increase their investment in female-funded enterprises. NatWest will support the task force, led by Alexandra Daly, founder of AA Advisors, announced today.
- Review existing and create new banking products aimed at entrepreneurs with family care responsibilities – UK’s leading financial institutions to review and develop set of products designed to help parent entrepreneurs to manage their businesses and the challenges of raising a family. NatWest is committing to developing a product to help, in consultation with entrepreneurs.
- Improve access to expertise by expanding the entrepreneur and banker in residence programmes – Private sector to support government-led information initiatives through providing access to further resources and expertise, and offering time to business hubs across the UK. NatWest is launching a pilot in Coast to Capital & York LEP.
- Expand existing mentorship and networking opportunities – Public and private sector organisations to share best practices on networking opportunities and roll-out a new centralised networking platform.
- Accelerate development and roll-out of entrepreneurship-related courses to schools and colleges – More organisations to offer their support to schools and colleges nationwide and private and public sector organisations to collaborate on a common set of educational materials focused on entrepreneurship, financial literacy and self-belief.NatWest has a range of programmes under way and is committed to collaborating with partners to scale a national programme to affect positive change.
- Create an entrepreneur digital first-stop shop – Public and private sectorto collaborate to create the UK’s first comprehensive digital first-stop information shop for entrepreneurs. NatWest has established a taskforce with a range of partners.
Ms Rose, deputy CEO of NatWest Holdings and CEO, commercial & private banking, has set out the findings and recommendations of the independent review into female entrepreneurship, as commissioned by the Treasury last September.
The Rose Review finds that only one in three entrepreneurs are women, a gender gap equivalent to more than one million fewer female entrepreneurs in the UK. Closing the gap between women and men could add an additional £250 billion in Gross Value Add to the UK economy, equivalent to 4 years of economic growth, says the review. Crucially women are also drastically under represented in the most productive sectors with fewer than one in four entrepreneurs in sectors such as transport and information technology being women.
Ms Rose said: “The UK has one of the most vibrant entrepreneurial communities in the world, but only one in three of our entrepreneurs is female – we need to be more ambitious and find ways to unlock the huge untapped potential.
“The launch of the Rose Review of Female Entrepreneurship provides the routes for how we, business, public sector and Government, can achieve this together. It is imperative that we support female entrepreneurs and capitalise on the missed opportunity which is significant, equating to more than 1 million missing businesses and £250 billion for the UK economy.
“I am passionate about this cause, and was proud to have been asked to lead this Review. Some of the findings are stark but by shining a spotlight on the issues and outlining the barriers and opportunities, the aim is to support the full potential of every woman who has the entrepreneurial spirit and ambition to start or scale their business. Today is just the beginning.”
Prime Minister, Theresa May said: “I want to build a country where all women can go as far as their talents and hard work can take them. It’s fantastic that we already have over a million women-led businesses, and the gender pay gap is at a record low, but the findings in this Review show there is much further to go.
“Alison and her team set out an ambitious path to smash this glass ceiling so that we can realise the full potential of female entrepreneurs and boost economic growth. I am committed to real change in this area, starting with our action today to encourage more companies to look at the gender split of who they choose to invest in.”
The Exchequer Secretary to the Treasury, Robert Jenrick, said: “Britain’s proud history has been built by entrepreneurs, but this proud tradition is at risk. Today’s striving business women are too often facing barriers to setting up and growing their own enterprise. These barriers don’t just hold back women, but every single one of us.
“The economy of the 20th Century was fuelled by this appetite to innovate, which in turn created opportunities and prosperity for all. I am extremely grateful to Ms Rose for conducting this review, which will now help us to tear down these barriers. Together we must fire up Britain’s entrepreneurial spirit for the 21st Century and ensure no one is held back from realising their full potential.”
The full Rose Review is available here: https://natwestbusinesshub.com/rosereview