Access to Funding
IntroductionClick to read
Despite the rapid growth of women-owned businesses, they tend to start their businesses with less working capital.
Compared to their male counterparts, female entrepreneurs have less access to financing.
It is estimated that women-owned enterprises globally have unmet financial needs of between $260 billion and $320 billion annually.
MicrocreditsClick to read
Microcredit is a common type of microfinance in which a very small loan is offered to a person in order to assist them in starting their own small business or becoming self-employed.
History of microcreditsClick to read
Most people credit the concept of “microcredit” to the Bengali economist Muhammad Yunus.
In order to fund their respective small companies, a group of women in Bangladesh launched this scheme in 1976 by borrowing $27. The women were able to maintain the company and repay the debt.
The Bangladeshi women who got microcredit lacked the funds to buy the supplies they needed to construct the bamboo stools they would later sell, and each individual borrower would be too risky to fund on their own.
They were able to start production thanks to collective borrowing, with the understanding that the loan would be repaid over time as they made some money
Private LoansClick to read
Loans provided to a person or business by a private institution or even a wealthy individual are referred to as private money loans, or simply private money. The group or person is referred to as a private money lender.
For a private lender, risk reduction is crucial since making money is the main objective. Before making a loan offer to a borrower, a private lender considers a variety of different aspects. Some of the most crucial are:
However, it is always a good idea for the lender to exercise due diligence and confirm any information the borrower submitted in order to obtain the loan.
Structural funds and EU Next Generation Funds
EU Structural Funds Principles Click to read
European Structural and Investment Funds (ESIF)Click to read
The ESIF focuse on five areas:
EU Next Generation funds for COVID-19 recoveryClick to read
The EU’s €800 billion Next Generation EU program is a temporary recovery tool to aid in the economy's recovery from the coronavirus epidemic and to create a greener, more technologically advanced, and more resilient future.
The European Commission is taking out loans on the financial markets to pay for Next Generation EU (the EU has a strong credit rating, which enables the Commission to borrow money at favourable rates).
The advantage is subsequently transferred by the Commission to the EU Member States directly through loans or to the Union budget through reduced interest payments on borrowings used to fund spending for the economic recovery.
More than 50% of the long-term budget and Next Generation EU are supporting modernisation, for example through:
In addition, the package pays attention to:
Summing upClick to read
Micro credits – private loans – EU structural funds – EU Next Generation – access to funding
- Learn about funding opportunities for women businesses
- Learn about micro credits opportunities and private loans
- Learn EU structural funds principles
- Learn about EU next generation funds for COVID-19 recovery
This module analyses access to funding for women’s businesses, including:
- micro credits
- private loans
- EU structural funds principles
- EU Next Generation funds for COVID-19 recovery