MORE women than ever are starting new companies in Scotland – but there is still more to do when it comes to challenges for female-led businesses, new research has found.

The study, conducted for the Rose Review Progress Report 2022 by mnAI, revealed that female-founded businesses are making up a record share of new firms, with 5951 companies established by women in Scotland last year.

That figure has more than doubled since 2018.

The Rose Review Progress Report 2022 on female entrepreneurship, published today, sets out the full extent of progress made since the inaugural report in 2019.

It outlines the extra support needed for female-led businesses to thrive, and the challenges that they have faced during the Covid-19 pandemic.

Across the UK, female-founded businesses account for a record share of new firms, outstripping growth in male-led firms for the first time.

More than 140,000 companies were established by all-women teams in the UK last year – and the figure is growing by a third each year.

The research also showed that the proportion of companies created by young women is growing faster than any other age group, with 16 to 25-year-olds founding more than 14,000 new businesses in the UK last year.

In total, 134 institutions with an investing power of nearly £1 trillion have now signed up to the Investing in Women Code.

The code is a commitment by financial services firms to improving female entrepreneurs’ access to tools, resources and finance. It commits lenders and investors to collect and report data about their performance backing female-led firms, and the number of signatories has leapt by a half over the past year.

However, the study has revealed that the impact of Covid-19 risks holding back progress.

It suggests that despite the rapid growth in female-led start-ups, female entrepreneurs have spent twice as long on caring responsibilities during the pandemic as their male counterparts, and that their businesses have been less likely to recover. In response, members of the Rose Review board have announced extra measures to boost support for female entrepreneurs.

This includes the launch of a nationwide Women Backing Women campaign from the Women Angel Investment Taskforce, in order to ensure female founders have a better chance to access early-stage investment.

A new recruitment campaign, with the personal engagement of NatWest Group chief executive Alison Rose and business minister Paul Scully, will encourage even more institutions to sign up to the Investing In Women Code.

Expanded schemes will also provide networking and mentoring opportunities to female founders over the next three years.

Alison Rose, CEO NatWest Group and author of the Rose Review, said: “We have seen real progress since 2019. Getting more funding to female entrepreneurs and unlocking their untapped potential continues to be a priority across our industry.

“But women still don’t receive all the support they need and the pandemic risks holding back progress, so we must go further to achieve the goals of the Rose Review.

“Data shows that more women than ever are starting new businesses and we must harness this potential.

“That means more financial institutions committing to delivering change and funding.

“We also need more direct support for businesses across the UK and we must propose fresh, imaginative solutions to the challenges posed by women’s caring responsibilities.”