Sex of Applicant and the Availability of Business “Start-Up” Finance

While women are undoubtedly disadvantaged in the process of preparing for a career in business ownership, there is a lack of experimental evidence to verify the belief that loan managers discriminate against women at the point of loan application. This study, therefore, investigates the extent to which concerns that women in business face discrimination from trading banks when seeking to raise start-up capital are valid. Scenarios of an application for loan finance to purchase a commercial enterprise were mailed to loan officers of major trading bank branches. The scenarios were identical in all respects, except that half included a photograph of a male applicant and the remainder a photograph of a female. Loan officers were asked whether or not they would approve loan finance for the proposed business, and to indicate factors that contributed to their decision. Significant differences in loan officer response to female and male applicants were observed. This supported the widely held perception that women face discrimination in seeking start-up capital.