The NSW Women’s Opportunity Fund
Disadvantaged women face a range of economic challenges. One specific challenge, that can be addressed, is the gap in capital available for women who own a viable small business. This policy brief canvasses a proposal for the New South Wales (NSW) Government to create a NSW Women’s Opportunity Fund (“the Fund”).
As a government-owned impact investment fund, which crowds in private capital, the Fund would provide financial products alongside holistic business support and advice to women entrepreneurs and small business owners who belong to disadvantaged groups. The Fund could provide capital in different forms and combinations (e.g., concessional loans, equity investments, grants) as well as facilitate access to a range of additional supports, such as networks and upskilling, to enable women to grow an existing business. Commercial financial institutions, particularly banks, would have strong reasons to participate in the Fund: to connect with potential business clients, while delivering on corporate responsibility objectives.
By adopting a social impact investment framework – one which encompasses economic security and good jobs – the Fund would differentiate itself from other sources of finance. In particular, the Fund would have a willingness and capacity to take on risk (for instance, when owners have few or no assets, or lack credit history), and to offer a degree of flexibility to its recipients, that reflects the lived realities of disadvantaged women. Moreover, the Fund would help overcome the human and social barriers to accessing capital, such as language barriers or a lack of social capital. These barriers can lead to an absence of relatable and approachable financing options in the communities where it is needed.
The Fund would aim to expand the ecosystem of successful small businesses owned by women in NSW. It would support a large number of conventional small businesses to scale up and generate sustainable business growth. In doing so, the Fund would generate social and financial returns to drive inclusive economic growth in NSW and change the cultural misconceptions that marginalise women, especially disadvantaged women, from business. There is a significant opportunity for NSW to help many women small business owners unlock their potential and achieve economic security through contributing to the dynamism and growth of the wider economy. Moreover, the Fund would prioritise businesses which would create good jobs (well-paying, respectful, safe, secure, flexible, predictable hours, career-advancing, purposeful), compounding the social benefits of its capital outlays.
The Fund’s role is to address the gap in capital for disadvantaged women who own viable businesses with some growth potential, and to positively shape markets to better meet their needs. Other sources of finance – savings, existing venture capital, commercial loans – are not readily available to the Fund’s target cohort. The Fund would address this gap in the market by providing a greater choice and volume of finance to small business owners.
Helping disadvantaged women achieve business success
It is now widely known that women entrepreneurs tend to have less access to finance, and less awareness of funding options. Women who experience forms of disadvantage, in addition to that due to gender, face even greater barriers to growing their business. In the context of NSW, such women could include: Indigenous women; migrant or refugee women; women in rural, regional and remote areas; women from low income households or backgrounds; and women living with a disability. This policy brief suggests that the Fund initially target refugee women and/or women in rural, regional and remote areas under pilot schemes, before scaling up to include a broader cohort.