Access to finance is considered as the most significant problem that is faced by the women entrepreneurship. The most common problem faced by women entrepreneur is lack of capital that is insufficient and unaffordable cash to start new schemes or to use in expansion of the business. Financial resources that affect the success are included in the second category of critical resources, which comprises of monetary assets and capital of the business.one of the main issue of an entrepreneur is to attain the finance in order to initiate and grow a business.
Capital is obtained from many ways such as government programs, business angels, and personal savings banks and jeopardizes capital funds. Each of these sources has a different result for the owner and also for the business. The important points for the success of the business are choice of suitable capitalization structure, a determination about the sequence of capital sources and easy approach to finance.
At same professional level and age, the gross annual income of women is usually smaller than the men before the start of business. This low gross annual income affects the ability of women to invest their own money and to achieve financial capital like credits or bank loans.
Women have refused the most significant resource that is access to capital markets. There are three reasons for women deprivation in capital markets: first, resource lenders may discriminate women due to outdated gender role beliefs; second, they believe they will be presented with different treatment that will decrease the ratio of lending applications in women business owners and third, they have less equality, skills, and experience than men in their business. Mixed results are obtained from the surveys that have examined these suppositions.
There are many issues that are faced by women entrepreneurs. These issues include weaker collateral position, discrimination by financial institutions or other providers and decrease external finance. Those women with longer duration of experience and with a university degree in the field of research faced no obstacles in obtaining finance for their business. Studies on accessing credit for SMEs reveal that it is a major challenge for business owners in developed as well as developing nations. However, the evidence strongly indicates that more restrictions are applied to women-owned businesses as compared to men-owned when it comes to financing the business.