Women entrepreneurs worldwide face a persistent annual financing shortfall of roughly $1.7 trillion, a gap the World Bank first estimated in 2017 and one that remains largely unclosed nearly a decade later. The shortfall limits business creation and expansion at a time when women-owned firms are demonstrating unusually efficient use of capital.
The problem is not a lack of entrepreneurial potential. A single mother seeking a loan to start a caregiving business may have a viable plan that would add value to her community, yet she can be turned away because she lacks sufficient collateral or because her projected returns do not meet a bank's underwriting thresholds. That scenario, described by the Ares Charitable Foundation, is common across the United States and even more pronounced in developing economies.
Structural barriers, rather than performance, explain much of the gap. Women often have limited access to financial products tailored to their circumstances and fewer networks that connect them to capital, mentorship, and markets. Traditional investment practices also tend to define value narrowly, focusing on revenue and profit while overlooking the broader economic ripple effects that women-owned businesses generate.
Recent research from MAD Ventures suggests that women-founded startups generate 78 cents of revenue for every dollar raised, compared with 31 cents for startups founded by men. Women-owned businesses also tend to reinvest up to 90 percent of their earnings back into their families and communities through spending on children, education, nutrition, and health. That spending supports local job creation, including for other women, and can produce economic benefits that extend well beyond a single company's balance sheet.
Philanthropy has stepped into the space left by conventional lenders. The Cherie Blair Foundation for Women, for example, provides programs focused on financial readiness, business growth, leadership, and one-to-one mentoring. Such support recognizes that closing the gender gap in entrepreneurship requires more than capital alone; women need the skills and networks to start, scale, and sustain their businesses over time.
The private sector is also being called on to act. The United Nations Global Compact urges companies to expand women's access to capital, markets, and leadership opportunities, and to integrate women-led businesses into global supply chains and financial ecosystems. Business groups argue that lasting progress depends on bringing private capital to the table alongside philanthropic efforts.
Barriers are not experienced uniformly. Jane Vernon, cofounder and CEO of The Acceleration Project, which offers free programs and mentorship to small businesses, said that small business programs are largely designed for entrepreneurs who do not carry the additional pressures facing women. The challenge is especially acute for single mothers, who must balance business ownership with caregiving, household income responsibility, time scarcity, and limited access to flexible work.
To better understand and address those specific obstacles, the Ares Charitable Foundation supports The Acceleration Project in testing solutions tailored to women business owners who are raising children on their own. The foundation argues that institutions typically do not account for the particular circumstances of these entrepreneurs, and that philanthropy alone cannot close the gap.
Advocates say the stakes extend beyond individual business owners. When women entrepreneurs can access capital and support, they hire, reinvest, and strengthen local economies. Failing to invest in them leaves measurable economic value on the table, particularly in developing countries where the multiplier effects of women's spending and job creation can be most pronounced.
The path forward, according to the foundation, involves reimagining the supports women need rather than expecting them to fit into systems built for different borrowers. That means combining philanthropic capacity-building with private-sector investment and more flexible financial products. Only then, the argument goes, can women entrepreneurs thrive and the broader economy capture the returns that come from investing in them.