Women entrepreneurs need a tribe of their very own

Globally, women are the ones who have been managing household finances. However, when it comes to business finances, women are significantly under-represented. Even so, studies also show that women outperform men in fund management and credit repayment, which would suggest financial acumen among them.

Why is it, then, that when it comes to starting a business, women are not asking for money? In our study of 898 women entrepreneurs (WEs), we found that less than 40% of them seek financial support from banks. Our study also revealed that more than 60% of WEs face several challenges while seeking financial support from banks. This brings us back to the question: Are WEs not asking for money? Or are WEs are not getting the money?

Also read: Women's financial literacy: What India can learn from Australia, Rwanda, Japan

We found that WEs often do not ask for money because they are not confident of their financial knowledge. This is on account of their gendered socialization that imposes a self-limiting belief which hinders their willingness to take financial risks.

Despite this, even when some women attempt to access credit, gender stereotypes held by loan officers, who are typically a male, contribute to unequal distribution of credit between men and women. Data from World Bank affirms the same, with men receiving credit equivalent to 52% of their deposits, while women get only 27%.

To overcome these self-limiting beliefs, women need to cultivate self-efficacy—a sense of self-assurance in one’s capacity to perform, cope and succeed under any adversity—in financial matters. Women at all levels and various stages have faced some challenge or the other while asking for money or in the process of getting it. To navigate these challenges, women need women supporters and cheerleaders who can encourage them in their journey of entrepreneurship.

Become financially confident: A study conducted by Lusardi and Mitchell found that women across the world showed a consistent pattern of ‘don’t know’ responses to questions related to financial literacy. This reflects an underlying lack of financial confidence, a result among many of things of constantly being discouraged from taking financial decisions.

However, instead of succumbing, women need to, first, financially educate themselves through online and offline courses or workshops on money matters; second, WEs should reach out to women in finance to seek financial advice and support. Several WEs reported negative experiences when dealing with male financial agents on account of biases.

In contrast, women financial agents, given their gender-specific experiences, are more sensitive to women’s needs and hesitancy, and could aid them in their entrepreneurial journey better.

Count on familial support: Women have to juggle societal expectations of care and household responsibilities on one hand and running a successful business on the other. Amid this, women rarely find alone-time to sit and gather all their thoughts.

This necessitates the need for not just a designated office space, but also designated time that women can carve out for themselves to gather their thoughts, prioritize their needs and work on themselves. However, this can be enabled only by a familial support system that not only understands her needs, but also offers assistance in ways that let her put her much-needed ‘me’ time to good use.

WEs have shared with us how their female relatives, especially their mothers and mothers-in-law, have been their pillars of strength, granting them the freedom to embrace their true selves without the weight of societal obligations of caregiving and domestic duties.

Also read: Financial literacy will empower women: Beti bachao, Vitt sikhao

Do not lose out on networking: Networking, as described by Malcolm Galdwell, is a way to connect with people who know many worlds. This makes networking a valuable tool for entrepreneurs to build professional relationships and partnerships, find mentorship and guidance, and learn from their peers and seniors in the industry.

However, often, women miss networking opportunities because of personal hesitancy and various structural limitations that may include lack of mobility, care responsibilities and gender biases. In contrast, as networking is usually dominated by men, personal hesitancy may stem from safety concerns and a fear of judgement.

For WEs to make the most out of networking events, here is a cheat-sheet:

· Be an early bird. Arrive early to snag the best conversations before the room gets crowded.

· Team up with fellow WEs for some mutual support (and fun)!

· Perfect your pitch. Craft a snappy 30-second introduction about who you are, what you love, and relate it to your current project. Think of it as your origin story.

· Identify your needs as an entrepreneur. Research attendees beforehand to find potential resource persons and mentors. Ice-breakers become a breeze with a bit of background information on others present.

· Have your business card up the sleeves. Hand it out to everyone you meet.

· Connect with your new mates on LinkedIn. It is like collecting the required ingredients for your successful business recipe.

· Be attentive for others’ stories, but do not forget to share your insights too. Make yourself visible and heard, just like men never fail to do.

· Last but not least, strut with confidence.

Create a female tribe: Women mentors, having faced gender and industry-specific barriers, are ideally best suited for providing mentorship support to WEs in their early-stage career, guiding them not only through the high tides of their entrepreneurial journey but also the gendered obstacles that women face everyday.

With the entrepreneurial space being typically male heavy, it can be hard to find a female mentor who shares a similar path. Nevertheless, this challenge can be mitigated by creating what we could call a female tribe—a kind of sorority where women with varied professional experiences come together to share their insights and guidance. Early-stage WEs can seek support from this female tribe, gaining just the space they need.

Also read: Gendered social networks are in the way of women’s career paths

By forming their own club, women entrepreneurs in particular and women in general can shrug off gender biases and build their financial confidence. By swimming together in a gendered world, WEs will not only be able to speak out louder on money-related matters, but also navigate financial depth with greater ease, thanks to their newfound camaraderie.

The authors are, respectively, a professor and research associate at the Indian School of Business (ISB)