Female entrepreneurs' access to entrepreneurial finance in Fiji: Challenges and success factors in accessing bank finance

The purpose of this study was to explore entrepreneurial finance challenges and how female entrepreneurs can overcome them. It identified the demand-side and supply-side challenges facing female entrepreneurs in Fiji‘s small and medium enterprises in accessing bank finance and ascertained how the challenges can be overcome. An extended 5M framework (money, market, management, motherhood, and individual characteristics meso/macro-environment) was used to explore the challenges. This study is a departure from previous studies that tended to compare female entrepreneurs with male entrepreneurs. The study also explored the effectiveness of government grants and credit schemes in assisting female entrepreneurs to access finance and the contentious issue of whether corporate finance theories (Pecking Order Theory and Life-cycle Theory) apply in entrepreneurial situations.
The literature review shows that the majority of studies on female entrepreneurs were undertaken in developed countries. Studies on female entrepreneurs in Fiji are limited. In a broader context, the review of the literature showed that the assessment of the effectiveness of the government‘s grants and credit schemes was seriously lacking. The tests on the application of Pecking Order Theory in entrepreneurial situations had mixed results. Questions are being raised about whether the Life-cycle Theory needs to be re-conceptualized for application in entrepreneurial situations.
A combination of post-positivist and constructivist paradigms allowed the researcher to use mixed methods research for this study in three stages: first, qualitative interviews with six bank officers; second, a quantitative survey of 24 female entrepreneurs; and third, qualitative interviews with 30 female entrepreneurs. The interviews with bank officers provided the researcher with the opportunity to obtain a balanced picture of the challenges and what can be done to ensure female entrepreneurs greater access to bank finance.
Data analysis showed, among other factors, lack of collateral and information asymmetry, were the major demand-side challenges of Fijian female entrepreneurs. On the supply-side, complex procedures, high-interest rates, sex stereotyping by the banks, and the ineffectively administered government credit schemes were found to be challenges to accessing finance.
Findings show that female entrepreneurs can overcome the challenges through education and training, building an asset base, and maintaining good relationships with the banks. While Fijian female entrepreneurs can overcome most of the demand-side challenges, it is not so easy for them alone to overcome all supply-side challenges. They need the support of the banks and the government. The findings also show that Pecking Order Theory and Life-cycle Theory do not apply to the financing practices of Fijian female entrepreneurs. This study advances the literature on female entrepreneurship and entrepreneurial finance by proposing an extended 5M framework, providing a framework for overcoming challenges of access to bank finance, and extending the literature on the application of traditional corporate finance theories in entrepreneurial situations, in the context of developing countries.
The study has implications for promoting female entrepreneurship in Fiji, which includes enabling support from the government and the banks through designing female-specific products and the removal of any sex stereotyping from society. Female entrepreneurs should expand their businesses as much as possible, upgrade their financial skills or hire accountants, and build a good reputation. The findings of this study open up other areas of research, especially about female entrepreneurs‘ access to other sources of entrepreneurial finance. They will also be of value to national policymakers and relevant stakeholders in enhancing the role of women in national development.