Banks accused of discriminating against female entrepreneurs

The government is to launch an investigation after a new report claimed that UK banks are discriminating against women seeking finance.

According to the study published by the Institute of Public Policy Research (IPPR), in the UK women on average can expect to pay 1% more on a business loan than men. In addition, male entrepreneurs in Europe are 5% more likely to successfully get a loan for their company, while women face more stringent collateral and guarantee requirements.

Loan officers are also using gender stereotypes, report author Professor Noreena Hertz said.

Women entrepreneurs are questioned whether they had undertaken sufficient research into their business significantly more often than male applicants, the study found, with pregnant women being assumed to not return to work after having a child.

Away from business, Professor Hertz claims to have found cases of women rejected for mortgages when on maternity leave, of banks rejecting mortgage applications from women when they found out they were pregnant, of women being asked about their "family planning" when applying for a home mortgage and of lenders insisting that pregnant women or women who have just given birth be back at work before they can get a loan.