Women-Led Firms Could Add NZ$10B to Economy: Claims Report

A new report from Westpac New Zealand has found that if these barriers are eliminated, women-led businesses could add an extra NZ$10 billion to New Zealand's economy every year. Encouraging More Women-Led Businesses addresses the economic potential that lies with women entrepreneurs and strongly advocates for more finance, networks and business support.

Although a body of research indicates that women run businesses as well or better than men, the report estimates that currently only around one-third of businesses are owned, or co-owned, by women. In many ways, they are more capital efficient and resilient in the long run. But the issue of structure persists in women's involvement in entrepreneurship.

The report identifies that women entrepreneurs continue to encounter various barriers such as lack of access to funding, limited investor networks, and ingrained social beliefs and norms that impede business development. Women's businesses are under-represented in New Zealand's total venture capital investment, with less than 3% of VC investment going to a women-owned business in 2024, despite their business performance.

Key Highlights:

• Women-led businesses could add NZ$10 billion annually to New Zealand's GDP by removing key barriers
• Westpac and re:ampd will support 500 women entrepreneurs with free coaching, mentoring, and networking
• Long-term economic gains could reach NZ$25 billion through better access to funding and support

Westpac New Zealand has announced a partnership with business coaching platform re:ampd, which is led by entrepreneur Marisa Fong, to help meet these challenges. As part of the initiative, up to 500 women business customers at the bank will get up to a year's worth of free membership to the bank's programs, including coaching and mentoring, business tools and networking, designed to assist women in starting and growing their businesses.

The report highlights the great economic value which might be unlocked should there be more women entrepreneurs supported, Cat Feaunati, Head of Business & Virtual Lending, Westpac New Zealand, said.

Our economists believe that if you tackle the current structural barriers, over time you can generate up to NZ$10 billion in GDP gains for New Zealand - and women-led businesses always return a strong rate of return and resilience, she added.

In general, the number of women business owners has increased by about 200 percent since the early 2000s, but the nation still has a significant gender disparity in business ownership, Feaunati said. She noted that women currently lack access to finance and professional networks and this would help them start and grow successful businesses.

The report also notes that when wider productivity gains and spillover gains are considered, the long-term economic gains may amount to NZ$25 billion. It calls on cooperation among financial institutions, investors, industry associations and authorities to minimize capital cost and access restrictions and enhance capital and business networks.

As part of its wider support for entrepreneurs, Westpac noted that it has been bolstering businesses in their first 2 years with its NZ$100 million start-up lending commitment, which was launched in October last year. The bank has already borrowed NZ$58 million under the programme, it said. Applicants do not need to submit extensive financial histories as would be normal with a loan application, but instead must submit a business plan, cash-flow forecast and statement of financial position.

Marisa Fong says she found a need to help women who are building businesses to be better supported and have a community to help them out. She feels that in developing a strong network, it will help women become successful entrepreneurs and also generate benefits for the communities and economy.

In addition, Westpac noted its own story of Dr. Vicki Beck, founder of Equistride Veterinary, who took advantage of its start-up lending program to launch her mobile equine veterinary practice following a move from the UK. The funding has helped her buy diagnostic equipment and a work vehicle and expand services throughout Auckland and Northland, said Beck.

The results are consistent with increasing evidence that women's entrepreneurship is not just about gender equality, it is also an important opportunity to boost New Zealand's longer-term economic growth.