Growth Market: Women's Businesses

Women who own businesses are sending the financial services industry a loud mesage: We're not getting a fair shake.

For example:

* Two-thirs of the respondents to a membership survey by the National Association of Women Business Owners believe they've been discriminated against while trying to secure business credit. Discriminatory tactics included requiring a male cosigner on a business loan.

* A study by the National Federation of Independent Business found that 41% of women contacted had been asked to list their spouses as cosigners, while only 33% of the men questioned were asked to do the same. The survey also found that women were denied loans more often than men.

* A national financial services firm surveyed 3,000 women and found that 75% felt they had not received equal treatment at banks or other financial institutions.

* And in a survey I did among colleagues, most said their female business-owner customers generally did not know what services banks offer beyond traditional deposit and credit products, nor did they understand when to use them. Most also said their female customers were usually not good negotiators and were generally unsophisticated about finance.

But more often than not, these customers are well prepared with their own business information, projections, and industry data. And they're open to discussion.

By the year 2000, women will own 40% of all U.S. businesses, it has been predicted. We in the financial services industry must make it a priority to meet the capital and financing needs of these women. We need to reexamine our approach to this group.

What can we do?

First, on an individual level, each of us can review traditional loan structure and collateral packages and look for better ways to finance growth. Let's look carefully at how commercial loans can be leveraged with the Small Business Administration, city and state economic development departments, other government agencies, corporate foundations, and other financial sources.

If the fit is not right at our own institution, let's help customers look for alternative relationships among our peers. Let's look for all the alternatives to traditional bank credit.

Let's educate ourselves about the concerns of female business onwers. We need to be sensitive, and we need to be fair.

Enlisting the Industry

We will also need to work together as an industry. In coming weeks, I will be calling on colleagues at other banking and financial institutions in Chicago and its suburbs. I will be asking them to join a select group of Harris Trust professionals in a collegial effort to examine service to female business owners - its problems and opportunities.

I hope bankers in other cities will do the same.

We hope to add to and build upon the good work already being done by partners such as the Women's Business Development Center in Chicago (I am a director) and the National Association of Women Business Owners. We will be examining programs to improve the flow of information from the financial services industry to the people who need it.

Things to Do

We hope to develop programs that include screening and consulting, basic education about banking services and processes for tyro female business owners, and advanced education for the more experienced.

At the same time, we will work to sensitize our colleagues in the financial industry about the needs and concerns of these business women.

These efforts are important not only in a social context but also as good business practice.

Ms. Reich is senior vice president at Harris Trust and Savings Bank, Chicago, and group executive in charge of its personal and private banking geoup.

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