BMO pledges $3B for women Business owners

TORONTO Bank of Montreal is attempting to position itself as the lender of choice for female entrepreneurs, announcing that it would make available $3 billion in capital over three years for Canadian businesses owned by women.

“Part of this is making it very clear that we’re open for business when it comes to female entrepreneurs and we want to do business in this space,” said Dev Srinivasan, head of Canadian business banking at BMO, in an interview.

The bank’s $3-billion announcement on Wednesday follows a commitment made by BMO in 2014 to provide an additional $2 billion in credit over three years for womenowned businesses.

But the latest announcement also comes after recent research showed that companies owned by women are being held back by a lack of access to funding, in part because of the bias of investors and lenders. A study released in February by BMO, Ottawa’s Carleton University and The Beacon Agency found women were continuing to “struggle to obtain capital for growth and start-up.”

“They are often self-funded, which slows their ability to grow,” the report added. “Unconscious bias impacts women entrepreneurs in obtaining funding from financial institutions and investors and in advancing their business.”

Likewise, the Canada-united States Council for Advancement of Women Entrepreneurs and Business Leaders, which is made up of some of the top female business executives in the two countries, reported in May that “there is a broad recognition that capital providers have not penetrated the female entrepreneurial market as well as they have the male entrepreneurial market.”

“This could suggest that there are weaknesses in capital providers’ ability to find business deal flow, as well as that women owners may not be actively pursuing capital financing at the level they could,” the council’s report said.

The Bmo-carleton-beacon study made recommendations for financial institutions, including that banks should “examine traditional assumptions in loan approval criteria with a gender lens and address unconscious bias in preparing the assessments.”

Srinivasan said the bank’s risk appetite would not change with the new funding, and that the money would still travel through the regular credit process, aimed at firms with some assets and revenue.