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As NAWRB has covered in previous blog posts, women-owned businesses remain disadvantaged throughout the business sector. This is particularly true in regards to access to capital, as women business owners struggle to obtain loans for their businesses. There have been recent developments eradicating these difficulties for women-owned businesses, such as the power of sole source authority for the Women Owned Small Business (WOSB) Program. Recently S&P Capital IQ, a New York-based financial intelligence provider, supplied an important contribution to help female entrepreneurs.
S&P released an SME (Small and Medium Enterprises) Scorecard “designed to provide a consistent and transparent lending framework for financial institutions that removes biases, specifically gender, and thus helps to level the playing field for women-owned small businesses.” This scorecard is a necessary measure, as the estimated credit gap for women-owned SMEs surpasses $280 billion, and affects approximately 70 percent of women-owned businesses around the world.
S&P aims at addressing women-owned businesses’ access to capital on a global scale, “S&P Capital IQ sought to develop a scorecard where the essential key risk factors were identified and applied unilaterally to all borrowers. Among them are country risk, industry risk, competitiveness, management and financial risk. The enhanced SME Scorecard enables lenders, particularly commercial and development banks, to better address underserved populations by providing loans with acceptable and sustainable levels of credit risk, while also ensuring these loans will have a positive social impact.”
S&P’s scorecard will help afford women business owners more equal access to resources; it is a noteworthy development in the movement to judge businesses based on merit rather than on the gender of their owner.
To learn more about the scorecard and S&P Capital IQ, please click here.