The Women Entrepreneurship Grant Scheme in Croatia provided grants to female entrepreneurs to encourage the development of their venture and reduce the financing gap between men and women entrepreneurs. The scheme operated from 2008 to 2012 and was provided by the Ministry of Entrepreneurship and Crafts. The scheme was part of wider efforts towards supporting women entrepreneurship, initiated in 2004 and continued through dedicated strategies (Strategy for Development of Women Entrepreneurship, 2010-13 and 2014-20).
Women entrepreneurs made limited use of public incentives to entrepreneurship. For example, in 2010, women entrepreneurs made up 39% of grant recipients, but received only 16% of the total amount despite the advantages given to women entrepreneurs in the selection process. In order to address this shortcoming, the Ministry of Entrepreneurship and Crafts of the Republic of Croatia launched several grant programmes that exclusively targeted women entrepreneurs with micro and small firms.
The initiative provided matching grants to women entrepreneurs, i.e. grants that were partially co-financed over 2008-12 – 75% of the project value (VAT excluded) covered by the Ministry and 25% covered by the firms. The grant amounts had no minimum in 2008 and ranged from a minimum of EUR 673 to a maximum of EUR 10 768 for 2009-11. In 2012, the minimum grant was raised to EUR 6 732 and the maximum grant to EUR 20 190. The need for firms to fund part of the project was dropped; the grand covered 100% of the projects in 2012.
To be eligible for a grant, women entrepreneurs needed to have a registered business in Croatia that earned a profit in the previous year. They must have employed at least one full-time staff (including the owner), could not be engaged in a bankruptcy procedure nor have any debt towards their staff or the state. The grants covered the following activities: i) development of business plan and consulting services; ii) entrepreneurial training; iii) purchase of equipment, tools and inventory; iv) preparing of documentation for bank loans; and v) childcare and kindergarten expenses.
In the period 2008-12, 1 284 grants were awarded for a total amount of HRK 15 605 987 (approximately EUR 2 104 089) and an average individual grant of HRK 12 154 (approximately EUR 1 639). An impact assessment showed that the grant scheme had a positive and statistically significant impact on 5-year firm survival. The evaluation also found a positive short-term effect on employment (for the first two years after receiving the grant), sales and value added (for the first three years). The evaluation estimated that the impact of the grant most likely occurred through an incentive effect, nudging women entrepreneurs to assess their businesses and consider investment opportunities.
The evaluation also estimated that scheme beneficiaries were more likely to obtain bank loans than other entrepreneurs and, for older beneficiaries, had a higher yearly value-added than other firms. This yearly additional value-added was 1.8 times larger than the total grant costs (including the grant itself and the additional bank loans secured). When considering only women entrepreneurs over 40 years old, the ratio was even higher: the benefits amounted to 2.7 times the cost of the support for these entrepreneurs.
This case study was adapted from the following source: Srhoj, S., Škrinjarić, B., Radas, S. & Walde, J. (2019). Closing the Finance Gap by Nudging: Impact Assessment of Public Grants for Women Entrepreneurs. Radni materijali EIZ-a, (2),5