Female entrepreneurs in the UAE and Saudi Arabia are more confident about raising capital for their businesses than their global peers, according to new research from HSBC Private Banking.
HSBC Private Banking’s ‘She’s the Business’ report reveals that 67% of female business owners surveyed in the UAE and Saudi Arabia feel confident when raising funds, ahead of the global average of 60%.
When looking at investors to pitch to, female entrepreneurs in the UAE and Saudi Arabia are drawn to those who are empathetic and have a similar experience to themselves (68%), who are transparent and clear about their investment criteria (60%) and who have a positive reputation (57%).
Women in the UAE and Saudi Arabia are also likely to have invested slightly more of their own money (US$138k) in their businesses than their male counterparts (US$132k), with female entrepreneurs slightly less likely to be rejected for capital than their male counterparts (49% of female entrepreneurs were rejected compared to 62% of male entrepreneurs).
Women in the region take 9.8 months on average to raise capital, while women in other global regions take 8.4 months.
When going through the pitch process, almost a third of female entrepreneurs pitch to panels of all or mostly men (32%) and only 8% pitch to mostly or all-women panels. This reflects a similar trend seen across all markets (31% and 8% respectively).
A third of female entrepreneurs (31%) in the UAE and Saudi Arabia, experience gender bias when securing capital, close to the global average of 35%. The particular manifestations of gender bias were around the level of questioning around risk in their business and financial plan (44%) and lack of questioning around potential gains or upsides in their business plan (31%). For male entrepreneurs, the figures were lower, at 25% and 8% respectively.
HSBC Private Banking commissioned ‘She’s the Business’ to explore the challenges facing female entrepreneurs when seeking investment. The research, conducted among more than 1,200 entrepreneurs in Europe, Asia, the Middle East and the US, will help inform HSBC Private Banking’s work to overcome the barriers facing female entrepreneurs.
Sobhi Tabbara, Global Market Head, MENA, HSBC Private Banking, said: “This report highlights the challenges female entrepreneurs face in the UAE and Saudi Arabia. Working in a very competitive market and having to contend with gender bias concerns is a tough environment to evolve in. However, I am pleased to see some good headway in the region, with high levels of confidence and strong success rates when raising capital. Nonetheless, we still need to do more to overcome concerns of bias and encourage more diversity among the investor community.”
Other findings include:
When preparing for their funding pitches, female entrepreneurs in the UAE and Saudi Arabia are most likely to seek advice from family or friends (57%), a business adviser (51%) and entrepreneur networks (43%).
There are a number of factors that female entrepreneurs suggest need to change to help improve the investment process including:
Balanced investor panels: Having a mix of different investors at the pitch is key to help prevent unconscious bias when pitching (43% of female entrepreneurs in the UAE and Saudi Arabia identified this as the most important change in the investment journey).
Investment knowledge: Female entrepreneurs would like greater clarity on the specific investment criteria needed, recommending that investors provide a checklist on how they come to make decisions (37%). Additionally, a third of female entrepreneurs in the UAE and Saudi Arabia said they would like to receive written feedback (31%).
Better preparation: Female entrepreneurs in the UAE and Saudi Arabia identified preparation as instrumental to a successful pitch, with 37% wishing they had done more scenario and future risk planning, more preparation (31%) and developed clearer financial projections/sensitivities (31%).
When asked what advice they would give future entrepreneurs when raising capital, female entrepreneurs in the UAE and Saudi Arabia said:
- To share the business plan with a trusted advisor
- Seek as much advice as possible from mentors
- Remaining confident throughout the pitching process
- Be prepared for highs and lows along the way
Dan Howlett, Regional Head of Commercial Banking, HSBC Middle East, North Africa and Turkey said: “SMEs and entrepreneurs are the engine of economic growth and the heartbeat of our region’s economies. These businesses generate about half of the UAE’s GDP and the government clearly wants that contribution to grow further still.
“HSBC believes in serving the whole ecosystem of the economy – be it through financial education, lending for growth, or being the trusted advisor that businesses need. Our new Business Banking service supports entrepreneurs with proven business models and ambitious international expansion plans to grow by providing a dedicated relationship management service, access to our unrivalled global network and extensive market expertise.”