Women Entrepreneurs Charged More by Banks
Byline: BENEDICT BROGAN
WOMEN are charged massively more than men when they borrow money to set up a business, a study has revealed.
It showed female entrepreneurs are forced to pay an average of 14 per cent more interest on bank loans.
Industry Minister Margaret Hodge has ordered an investigation into what she fears may be systematic discrimination in the banking system.
Mrs Hodge, the minister responsible for women and enterprise, said: 'I know that women are much more risk averse than men.
'If it costs them more to borrow that's yet another barrier that stops us seeing their potential.
'I have asked why it costs them more, and so far no one has given me a credible answer.' The Department for Trade and Industry will carry out the inquiry, while Mrs Hodge said she is 'going to be talking to the banks about it'. The study, by the University of Warwick, found most female-owned businesses pay 2.9 per cent interest over the Bank of England's base rate, compared to 1.9 per cent for men.
With the base rate at 5.25 per cent, a man running a small business pays an average of 7.15 per cent to borrow money, while a woman is charged 8.15 per cent - a 14 per cent higher cost of borrowing.
The study, based on a 2004 survey of small and medium enterprises, does not say what could account for the gap, but it insists the numbers are 'robust'.
Jacqueline Gold, the chairman of lingerie chain Ann Summers, who also advises budding women entrepreneurs, said: 'If this is true it's outrageous and discriminatory. …