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Overcoming bias against funding of female-led entrepreneurial initiatives: the democratizing influence of online crowdlending platforms

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Abstract

Crowdlending platforms are becoming an increasingly prominent alternative funding channel for marginalized entrepreneurs to traditional financing. We examine whether the gender bias generally seen in conventional funding channels extends to the funding of female-led ventures in online platforms and how this potential bias affects service businesses. Our analysis of the KIVA crowdlending platform suggests that while online crowdlending platforms exert a democratizing influence on the funding of female entrepreneurial ventures, female-led service businesses were less able to get financing, mainly for larger loan amounts and longer loan terms. Our findings have significant implications for female entrepreneurs working for marginalized/social causes.

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Acknowledgements

The authors thank Boise State University, College of Business and Economics Summer Research Grant program for its generous support. They also wish to thank Professors Sang Lee and Alicia Mas-Tur for their guidance and feedback on earlier versions of this manuscript. The first author completed some part of this study while at the University of Waikato, New Zealand. He thanks Waikato Management School for the support.

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Authors and Affiliations

  1. School of Business, Southern Illinois University Edwardsville, Edwardsville, USA

    Shivendu Pratap Singh

  2. College of Business and Economics, Boise State University, Boise, ID, USA

    Trina A. Sego & Shikhar Sarin

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  1. Shivendu Pratap Singh
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  2. Trina A. Sego
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Correspondence to Shikhar Sarin.

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Appendix Sample loan profile of a female entrepreneur

Appendix Sample loan profile of a female entrepreneur

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Singh, S.P., Sego, T.A. & Sarin, S. Overcoming bias against funding of female-led entrepreneurial initiatives: the democratizing influence of online crowdlending platforms. Serv Bus 16, 907–933 (2022). https://doi.org/10.1007/s11628-022-00500-0

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