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8/3/2019 Credit Worthiness of Women Entreprenurship
1/21Electronic copy available at: http://ssrn.com/abstract=1424275
1 | P a g e
Credit Wor thiness of Women Ent r epr eneur s
in Banglad esh
[This Assignmen t is a Par tial Fulfillm en t of the Orienta tion Cour se]
Sub mitted By:Md. Masud ur Rah man
Progr am Officer
Women Entrep ren eur s Developme nt Section
Subm itted To:
The Man aging Director
Small & Medium En terpr ise Found ation Royal Tower , 4 Pant ha pat h, Dha ka-121 5.
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| Cont ent s: 1. Abstract 032. Introduction 033. Women Employment Status in Bangladesh 054. Policies and Programs Encouraging Women Entrepreneurship 065. The UN Convention- Beijing Declaration 076. Government Credit Policy for Women Entrepreneurs 087. Requirements and Women Capacity to Receive Credit 118. Supporting Services by the Organizations to Make the
Women Entrepreneurs Credit Worthy12
9. Problems faced by the Bankers to Provide Credit to WomenEntrepreneurs
18
10.Remedies to Overcome the Problems 1911.Opportunities to Provide Credit to Women Entrepreneurs 2012.Conclusion 21
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[Abstract: Bangladesh is a densely populated country which is also belongs
to the least developed countries. About half of the populations of this
country are female. There was a time while these large numbers of women
were engaged only with homemaking or reproduction and rearing of
children. Women in significant number are now seeking employment
outside the bounds of their homes in nearly all fields. Some of the womenare coming to entrepreneurship. From the very beginning they have been
facing different problems to access to institutional credit facilities. This is
because of the lack of capacity of the women entrepreneurs in the one hand
and lack of confidence to the women entrepreneurs by the financial
institutions on the other hand. Different wings of the government,
Bangladesh Bank, SME Foundation, Financial Institutions, NGOs, trade
bodies and public-private partners are striving to eliminate these problems.
Now a days credit worthiness of the women entrepreneurs are increasing as
a result of the government initiatives, role of SME Foundation, activities of
the different trade bodies, products/services offering by the Financial
Institutions especially by the commercial banks, and more importantly
change in the mind set of society in favor of the actual and potential women
entrepreneurs.]
1. IntroductionFEMALES are roughly half the population of Bangladesh. The numerical strength of the
female population should point towards the indispensability of utilizing their full
potentials for economic growth and development. Keeping such a vast number in thepopulation limited to the role of homemakers or reproduction and rearing of children
only, means keeping half of the population away from gainful economic activities. All
nations in the modern times that have climbed up the economic ladder made full use of
the productive capacities of their entire working population regardless of gender.
Optimum production of goods and services on which depend economic prosperity and
well-being of the people as a whole, cannot be achieved where a very great number in
the population are confined to non-paying traditional chores in the households. But
cultural and religious factors have tended to force such unwelcome restraints on the
females in Bangladesh. It is a heartening sign, though, that such an ossified outlook
about women's role is starting to change.
Almost all the concerns of Bangladesh have befittingly underscored the need for
extending all possible supports by the commercial banks and financial institutions in
order to promote women entrepreneurship, particularly in small and medium
enterprises. They recognized the need for different programs which includes lowering
the existing rate of interest on credits, setting up SME unit or desk in commercial banks,
simplifying loan disbursement system and creating SME-friendly tax, duty and VAT
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structure. The concerned authorities do need to implement such measures in earnest
sooner than later to help strengthen efforts for women's empowerment which is also an
important objective of national poverty strategy.
Women in significant number are now seeking employment outside the bounds of their
homes in nearly all fields. A notable rise in this increasing participation of women ineconomic activities is the rate of their successes in different fields of enterprise. Non
government organizations (NGOs) have been particularly successful in rousing and
helping rural women to come forward to set up dairies, poultries, vegetable farming,
small scale trading and other non-farm enterprises. The NGOs have replicated their
rural experience also in the urban areas and helped the establishment of enterprises
run with female manpower. These developments have been contributing notably to the
net of output in terms of goods and services in different areas while enabling the
women entrepreneurs and workers to become more and more resourceful and climb
out of the trap of poverty. Now a more pro-active role by the commercial banks,
financial institutions and National Board of Revenue will certainly go a long waytowards fulfilling one prime objective of national poverty strategy.
The greatest benefit of women's empowerment through their direct participation in
income-generating and wealth-creating activities can certainly come from helping out
females in the rural areas where they are located in the greatest number. Various
supportive policies of the government, in tandem with the efforts of the banks and
financial institutions, should, therefore, be coordinated to facilitate the economic
empowerment, particularly of rural women in the highest number. The city based
women entrepreneurs should also be the beneficiary of such policies and measures.
Some businesses run by women in Dhaka and the other cities by women of upper andmiddle class origin, are doing exceptionally well. This shows the great possibilities of
the country's educated female entrepreneurs coming from the higher classes. Given
more supports through fiscal policies and in areas of institutional credit, this group may
achieve wonders in different fields of enterprise creating opportunities for large scale
employment and earnings of workers of their own gender.
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2.Women Emp loyment Statu s in BangladeshWomen in the rural informal sector are either self-employed or employed in family
based enterprises that includes both agricultural and non-agricultural sector. These
activities which include homestead agriculture, livestock and poultry rearing, fishfarming, nursery and tree plantation, tool making, kantha sewing, fish net making,
food processing, tailoring, rice processing etc. have been regular and invisible
sources to family income supplementation. A sector- wise distribution of employed
persons in rural areas shows that agriculture is the pre-dominant source of female
employment, followed by the manufacturing sector.
Table-5: Sex base d Distr ibut ion of Em ploymen t
Occupation
National
occupational
employment (%)
Share of Male
employment at
total employment(%)
Share of Female
employment at total
employment (%)
Technical 3.3% 3.5 3.0
Administrative 0.4% 0.6 00
Clerical 2.2 3.2 0.6
Sales 11.3 16.8 2.2
Services 3.5 2.4 5.4
Agriculture 63.8 54.6 78.8
Production 15.5 18.9 10.0
Total 100 100 100
Source: Statistical Pocketbook, Bangladesh 99, Bangladesh Bureau of Statistics,
Government of the Peoples Republic of Bangladesh, Dhaka 1999 (Page 144).
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3.Policies and Pr ogr ams En cour aging and Sup por tingWomen Entr epr eneur ship
The importance of women entrepreneurs in the national development process has
been acknowledged by successive governments and steps initiated to realize these
objectives. Consequently, under successive Five Year Plans, womens development
initiatives have been gradually integrated into the macro framework and multi-
sectoral economy to bring women into the mainstream of economic development
and encourage potential women entrepreneurs realizing their business plans.
In all Development Plans, i.e. from the First to the Fifth Five Year Plan, development
of women in all spheres of our national life has been given priority. The First Plan
(1973-78), as for example,emphasized a welfare-oriented approach and focused on
rehabilitation of war-affected women and children. The Two Year Plan (19 78-80)
was characterized by a shift from welfare to development efforts. The Second Plan
(1980-85) emphasized creating a congenial atmosphere for womens increased
participation in development through expanding opportunities for skill
development, credit and entrepreneurship development program. The Third Five
Year Plan (1985 -1990 ) had specific objectives to reduce disparity between
development of men and women. The Four th Five Year Plan (1 990 -95) placed
women within the context of macro framework with multi-sectoral thrust and
focused more on the development of poor and disadvantaged women.
In the Fifth Five Year Plan (199 7-2002 ) as many as 24 goals and objectives are set
for development of women and children in the country. These goals and objectives, if
implemented properly will definitely contribute with the participation of women in
every sphere of our national life.
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4.The UN Con ven tion-Beijing Declar at ionThe Fourth World Conference of United Nations on Women Development in Beijing,
1995, adopted the Beijing Declaration: Platform for Action Plan (PFA). The PFA
provided an agreed upon strategy for global community to move forward and
entrust the governments for the development of women in all areas.
In article 11 and 13, the Beijing Declaration distinctly mentions the issue for the
development and emancipation of the women. Article 11 of the PFA provisions for
general development of the women. Article 12 on the other hand mentions the issue
of the equal economic right and opportunities and development of women. It
includes the right of the women for credit, which is a basic pre-condition for the
development of the women entrepreneurs. The two articles are:
Ar ticle 11
State parties take all appropriate measures to eliminate discrimination against
women in the field of employment in order to ensure, on the basis of equality of men
and women, the same right in particular: The right to free choice of profession and
employment, the right to promotion, and security and all benefits and conditions of
service and the right to receive vocational training, including apprenticeships,
advanced vocational training and recurrent training
Ar ticle 13
State parties shall take all appropriate measures to eliminate discrimination against
women in other areas of economic and social life in order to ensure, on a basis of
equality of men and women, the same right, in particular to: The right to bank loans,
mortgages and other forms of financial credit
The government of the Peoples Republic of Bangladesh has adopted the Beijing
Declaration and the Platform for Action. The government commits to implement the
resolution of the Deceleration in its relevant polices. The Ministry of Women and
Children Affairs has set up an inter-ministerial Task Force to follow-up the
implementation of the resolution of the Platform for Action Plan culminating the
National Policy and National Development Plan and for development and
empowerment of women and protection of womens rights.
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5.Gover nm ent Cr ed it Policy for Women Ent r ep r eneu r s5.1.1.Cr edit Policy and Indu str ial Developm entCredit plays a central role in industrial development. So access to credit facilitiesin the modern economic world is a determining factor of the level of economic
activity and growth. The experience of the developed world shows that not only
economic endeavor but also social endeavor like education is ensured by
adequate supply of credits. But there are various formalities and complicated
procedures, which in most cases make credit a relatively inaccessible commodity
to meet the growing need of the entrepreneurs of developing countries like
Bangladesh.
Academicians and people from the practical field also have emphasized the
necessity of credit for the promotion of women entrepreneurs in various ways. According to Dr. Muhammad Yunus of Grameen Bank, credit creates hope and
ambition for change in the women business peoples and potentials
entrepreneurs. Jennifer Riria-Ouko, Managing Director of Kenya Women's
Finance Trust have the view that "Direct financial services are the key way to
empower women and empowering women is the only way to achieve total
development".
Bangladesh has a wide network of NGOs that sponsor schemes targeted towards
lending to women on preferential basis. BSCIC, MIDAS, NASCIB, Women
Entrepreneurs Association, Bangladesh, Jatiyo Mahila Sangstha have beenplaying in this respect a leading role. The DCCI has joined this program with
specific objectives and targets for bringing the women entrepreneurs in the
mainstream economy. And in this a sample survey to assess the status of women
entrepreneurs in Bangladesh has already been completed by the DCCI to plan a
strategy what are needed for women entrepreneurship development.
5.1.2.Cr edit Policy for the Women Entr epr en eur sThere is no credit policy in the country, which could be devoted for women
entrepreneurship development. Certainly it could be questioned: Is specific
credit policy necessary for the promotion of the women entrepreneurs? Is it not
tenable since the government is issuing or has issued policies concerning almost
all the sectors, which have preponderance of private sector involvement
including women entrepreneurs. Is not it sufficient to have a well designed credit
policy of the country within the framework of a more comprehensive financial
policy, which certainly include the necessity of the women entrepreneurs?
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In place of a credit policy, what is available is a set of credit arrangements guided
by Bangladesh Bank (BB). This is arranged by the central bank and executed by
the individual commercial banks, specialized leasing and other types of banks,
which operate in the public and private sectors. Under the financial sector
reform a lot of flexibility has been ensured for running the credit system. Now an
interest band based client relationship is allowed rather than a fixed rate ofinterest as used to be prescribed by Bangladesh Bank earlier. But in absence of
any mandate laid down by the Bangladesh Bank, it is seen that private banks are
more prone to financing export-import sectors than to go into long term lending
for industrial units, because it is more profitable and predictable for the banks.
There is no policy prescription in the Industrial Policy 1999 that suggests that
bank or other financial institutions should have special arrangements for
financing women's enterprises. The Industrial Policy does identify women and
their financial or other needs what is done in India where Industry Policy
incorporates special arrangements for women enterprises. Thus, it is expectedthat overcoming the shortcomings of the Industry Policy 99 in respect of special
financing arrangements for women enterprises like permission for using share
market for capital mobilization may be considered.
In Bangladesh, a special bank named BASIC is established with the mandate to
finance small and cottage industries sector. Since its direct lending program
could not be so successful, so it is now operating through NGOs in this respect.
But, unfortunately, its mandate is not adequately utilised by the lending of NGOs.
The NGOs do not finance small industries or even cottage industries of higher
levels. The statistics from1998 in respect of this function of BASIC show that outof 237 projects directly funded by the bank only two were women
entrepreneurship related. BASIC's involvement in funding women's enterprises
can, therefore, be termed very insignificant, in that respect, the function of BASIC
is not worth mentioning.
5.1.3.Cr edit for Women Entr epr eneu r sMost of the organizations, institutions and agencies, however, sponsor very small
loans. Such loans may be sufficient for keeping the beneficiaries above the
poverty line but not adequate to enter into business at a higher level, which
could be designed as enterprise. These institutions follow, however, the policy
for promotion of self-sustaining employment and income generation for the poor
and vulnerable women especially in rural area. Certainly the programs of these
institutions have useful impact for poverty alleviation and self-employment. And
it must be recognized that these programs are not designed to promote women
entrepreneurship and meet the needs of women entrepreneurs.
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There are a limited number of banks in the public sector and in the private
sector, which are sponsoring lending programs for women catering to their
needs for capital. These loans do not, however, exceed TK 3 lakhs and are mostly
not collateral based and can cater to women entrepreneurs who are operating
above self-employment levels but on a limited scale which is equivalent tocottage/micro-industries level. Those lending schemes are largely project based
and do not constitute an integral part of lending even in case of public and
private sector banks. The institutions, which do not insist on collateral for these
loans do, however, insist on guarantees from husbands or relatives of the
intending women borrowers. Thus male dependency in this sphere of lending
even for a small amount is very prominent and that handicaps women
entrepreneurs to obtain loans.
For small and medium size women entrepreneurs, there is no special credit
program in the country. Credit is most valuable for the development of the smalland medium size women entrepreneurs. Because, from small and medium size
entrepreneurs grow the leading industries. Besides, small and medium size
entrepreneurs play decisive role in the direction of the future development. On
the other hand, medium and long term credit is entirely collateral based, which is
subjected to a multitude of cumbersome and complex formalities. Besides, the
rate of interest is relatively high, which discourages women entrepreneurs to
utilize the lending facility of this kind.
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6.Requ irem en ts and Women s Capacity to Receive Cr ed it6.1. CollateralWomen entrepreneurs lack resources/capital due mostly to unequal inheritance.
For bank loan women need to give collateral except in very few cases of projects
catering to small needs. It is a social problem that the loan given to women needsto be guaranteed by the husband, father of the family though this is not a legal
requirement. On the other hand, families feel more comfortable supporting
financially a son, that a daughter for capital.
6.2. InfrastructureBanks often want to see show rooms or shops before lending though this
requires capital. Most women start with home based activities and cannot afford
the expenses of taking possession of show rooms shops.
6.3.
Trade Licen seTo get a loan or a trade license one has to have as signboard or shop. Form
womens small endeavors like home based tailoring or fast food preparation,
they cannot put up a signboard in a rental premise. The landlord does not allow
that because utility charged become high. Women owned enterprises are mainly
fount at rental premises particularly in urban areas like Dhaka, and hiring the
premises becomes a difficult position for women in smaller towns.
6.4. Tax Ident ification Num berA Tax Identification Number (TIN) is required for getting a trade license and
bank loan. To get a TIN for a trade license one has to submit tax return even
before and income earned.
6.5. Man ager ial Know-howWhile the efforts from the difference bodies working for the women
entrepreneurship development trying to remove the obstacles for getting loans
from the commercial banks, the lack of entrepreneurial, managerial and
technical skills also inhibits their capacity to grow and enhance their
competitiveness.
6.6. Sus ta inab ility of Busin es sWomen work in a limited number of sectors such as handicrafts, dress-making etc.and this makes competition extremely high. The dress-makers generally have a
seasonal business and they have to compete with imported goods and shops in local
markets. Many women do not have their won shops and have to supply to other
markets on credit which bocks their capital and providers low retunes. This type in
sustainability discourages the bankers to provide loans to the women
entrepreneurs.
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7.Supporting Services by the Organizations to makethe Women Entr epr eneu r s Cr edit Wor thyThere are so many government wings, chambers, trade associations, and
independents bodies are working in the country for developing the women
entrepreneurs. Some of them are working the capacity building, some of them areworking as the bargaining agents, some of them are providing credit facilities and
some of them are providing diversified for services to the actual and potential
women entrepreneurs. Some of the major organizations those who are working for
developing women entrepreneurs in the country are discussed hereafter.
7.1. Ser vices of Finan cial and Credit Institut ionsGenerally, financial institutions and banks extend credit for women under micro-
credit program for poverty reduction. Based on the cost of the fund, the interest
rates of these credits vary. For this purpose, mainly donor supported project
funds are used, though some funds are also provided by Bangladesh Bank. The
Bangladesh Bank directs the commercial banks to lend at least 1% of their
lending capital for industrial sector. 5% is expected to be spent for SCI sector.
These loans are often operated through NGOs or development agencies. Men
mainly access the investment in the industrial sector. However, other than for
poverty reduction project loan, there is no special regulation for credit for
women entrepreneurs.
Since the banks do not preserve gender based financial data, it is not possible to
provide information in this regard. Some banks have ladies branches. But the
objective of the activities is to mobilize savings and not encourage investments.
Besides, the number of ladies branches are very limited in compared to the
needs (Table - 7). Most of these branches, however, incur loss, because they
function as deposit collectors rather than lending institutions. Though not legally
consistent, the banks and some support programs openly insist on the consent
and guarantee of husbands' or other male relatives' sanctioning loan to women.
The number of women borrowers from banks is limited and is extremely lower
than that of men.
Table 7: Ban k-wise Numb er of Ladies Bran ches
Sl. No. Name of Banks Countries Total Branches of Banks
1. Sonali Bank 22
2. Janata Ban 5
3. Agrani Bank -
4. Rupali Bank Ltd. 9
5. Uttara Bank Ltd. I
6. Pubali Bank Ltd. -
7. Total 37
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Source: Accessibility of Women in bonding services, Bank Panorama, Vol. X,YI,
Nos. I & 2 A, March & June, 1996 (Page 122)
Table 8: Ban k Finan cing to Wome n Bor ro wer s by Yea r
Same of thebank
No of Loan ee s Amount Disbursed
1993 1994 1993 1994
Total* Female** Total* Female** Total* Female** Total* Female**
SB*** 292 - 1,925 1 12,353 - 27,521 -
JB 347,312 4 416,773 6 480,765 57 840,519 217
AB 410,741 23 451,123 46 262,368 1,117 305,536 386
BSB 634 1 629 1 6,620 7 3,060 -
ABBL 1,625 8 1,725 8 75,214 333 72,664 152
NBL 6,376 1 6,751 2 80,100 1 87,700 300
Sources: Shoaib Ahmed, Role of Women Entrepreneurs in the Economy, JOBS,
FBCCI
Note:* Total includes all types of loanees, loans and advances
** Female includes only industrial and trading loans advanced to women
*** Sonali Bank Figures only include industrial sector
SB= Sonali Bank, JB= Janata Bank, AB= Agrani Bank, BSB= Bangladesh Shilpa
Bank
ABBL= Arab Bangladesh Bank Ltd., NBL= National Bank Ltd.
7.2. Supporting Services of Public and private Institutions andAgencies
It was planned to provide approximately Tk.25.00 lakh (US$ 76,095) among the
target beneficiaries of the project as credit support to undertake various incomes
generating activities and establish different production units. A total amount of
Tk. 34.82 lakh (US$ 105,984) was disbursed among 2725 target women.
In accord of the Project, BSCIC provided following Skill Up-gradation Training:
Table-9: Skill Up-grada tion Train ing
S.N. Activities Number ofCourse Number ofParticipants Duration of theCourse Months
1 Tailoring 8 90 3-6 Months
2 Bamboo/Cane Works 2 32 3-4 Months
3 Weaving 1 15 8 Months
4 Bag Sheet/Muffler Making 3 52 2-3 Months
5 Bee Keeping 1 20 2 Months
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Source: Terminal Report on Self-Employment For Rural Destitute Women in
Bangladesh Through Cottage Industries Project, Phase II, Mrs. Farida E. Arif,
Dkaka 1991 (page 14).
During implementation of the project, linkages were established with the local
government institutions and other government departments.
The BSCIC supports enable some of its beneficiaries to emerge as small
entrepreneurs. But the women beneficiaries seem to be completely neglected by
the BSCIC in its respective activities. The women who were able to emerge as
entrepreneurs due to supports of the BSCIC, make only 3.8% of the total
beneficiaries of the kind (Table 10). And only 2.0% women beneficiaries of
BSCIC manage their business self.
The Table 11 shows that most of the women entrepreneurs supported by the
BSCIC to grow are involved in "Food and Allied" and "Textile" sectors. Only 4
women entrepreneurs are involved in Engineering and 1 in "Chemical and
Pharmaceuticals" sector. In other sectors, no women entrepreneur is present.
This shows that even the biggest and most important public agency in this
respect remained till 2000 in supporting the women entrepreneurs unsuccessful.
Table 10: Industries Owned and Managed by Women Entrepreneurs in
Eight Indu str ial Esta tes o f BSCIC
Sl.
No.
Name of Industrial
Estate
No. of Enterprises Ownership Management
Operating
(No)
Under
Construction
(No)
Non
Operating/Sick
Total
(No)
Men
(No)
Women
(No)
Men and
Women
Total
(No)
Men
(No)
Women
(No)
Men and
Women
Total
(No)
1.Tongi
(%)
137
(84.1)
9
(5.5)
17
(10.4)
163
(100.0)
146
(89.6)
5
(3.1)
12
(7.4)
163
(100.0)
161
(98.8)
2
(0.2)-
163
(100.0)
2.Natore
(%)
8
(40.0)
12
(60.0)-
20
(100.0)
19
(95.0)
1
(5.0)-
20
(100.0)
19
(95.0)
1
(5.0)-
20
(100.0)
3.Bagerhat
(%)
7
(87.5)
1
(12.5)-
8
(100.0)
6
(75.0)
1
(12.5)
1
(12.5)
8
(100.0)
6
(75.0)
1
(12.5)
1
(12.5)
8
(100.0)
4.Satkhira
(%)
3
(50.0)
2
(33.3)
1
(16.7)
6
(100.0)
6
(100.0)- -
6
(100.0)
6
(100.0)- -
6
(100.0)
5.Dinajpur
(%)
47
(87.0)
1
(1.9)
6
(11.1)
54
(100.0)
51
(94.4)
3
(5.6)-
54
(100.0)
51
(94.4)
3
(5.6)-
54
(100.0)
6.Bogra
(%)
54
(65.8)18(22.0)
10
(12.2)
82
(100.0)
77
(93.9)
5
(6.1)-
82
(100.0)
82
(100.0)- -
82
(100.0)
7.Thakurgaon
(%)
8
(66.7)
1
(8.3)
3
(25.0)
12
(100.0)
12
(100.0)- -
12
(100.0)
12
(100.0)- -
12
(100.0)
8.Jamalpur
(%)
24
(48.0)
20
(40.0)
6
(12.0)
50
(100.0)
48
(96.0)-
2
(4.0)
50
(100.0)
50
(100.0)- -
50
(100.0)
Total
(%)288 64 43 395
365
(92.4)
15
(3.8)
15
(3.8)
195
(100.0)
387
(98.0)
7
(2.0)
1
(0.02)
395
(100.0)
Source: Assessment of the Implications of Policies and Measures for women
Entrepreneurship Development in Bangladesh, CIDA, Dhaka 2001(page 26).
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No. refers to number of industries owned managed absolutely by men orabsolutely by women or jointly owned managed by men and women.
Figures in parenthesis indicate percentages.
7.3. Sma ll & Mediu m Ente rpr ise Foun dat ionThe Government has been the pivotal input into the creation and capitalization
of the SME Foundation (SMEF) as an apex institution. SMEF will implement the
SME policy strategies, and in addition, will be tasked with informing, advocating,
facilitating, financing, planning, coordinating roles aimed at SMEs development.
The SMEF is a limited company licensed by the Ministry of Commerce as a non-
profit organization and registered under the Companies Act (Act XXVIII) of 1994.
The SME Foundation plays its role in helping the SME entrepreneurs including
the women entrepreneurs right from the grass root level to the national level byconducting various programs in an aim to develop the SMEs in the country.
The wings of SME Foundations are working for the development of SMEs in
general and Gender wing of the SMEF is working for the women SME
entrepreneurs development in particular. Different programs and projects of
SMEF are playing a vital role to smooth the credit flow to the women
entrepreneurs. Some of the important of such programs/projects are:
Policy revision and present recommendation to the concern bodies infavor of women entrepreneurs.
Capacity building of women entrepreneurs. Awareness raising program for increasing women participation in
business.
Ensure access to finance by the women entrepreneurs: Revise existing policy to increase access to finance Organize workshop/seminar/round table discussion with the
concerns to smooth credit flow to the women entrepreneurs.
Conducting meeting with the policy makers. Provide gender sensitive orientation to the bankers to smooth
credit flow to the women entrepreneurs.
Marketing facilities for the women entrepreneurs. Technological support for women entrepreneurs. Establish linkage with institution and women entrepreneurs. Infrastructural facilities for women entrepreneurs- advocate for
allocating land to women entrepreneurs.
Capacity building program for minority women entrepreneurs.
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7.4. Micro Industry Development Assistance and Services(MIDAS)
MIDAS Financing Ltd., the sister concern of MIDAS, a non-bank financial
institution licensed by Bangladesh Bank from October 1999 under the Financial
Institutions Act. 1993 has taken over the enterprise financing of MIDAS. It is alsoimplementing the Women Entrepreneurship Development (WED) program of
MIDAS, which aims at mainstreaming women entrepreneurs.
Among all other activities MIDAS Financing Limited financing suitable projects of
women entrepreneurs and monitoring these projects. More than 400 micro and
small enterprises owned and run by women entrepreneurs have been financed
by MIDAS till October, 2000.
Major activities of MIDAS are centered in Training, Trade Fair, Financial
Assistance and MIDAS Mini Mart (an opening of women entrepreneurs products)are playing vital role to credit worthiness of women entrepreneurs.
7.5. The Dhak a Cham ber of Comme rce a nd Indus tr yDCCI is a limited company incorporated under the Companies Act 1913. It was
established in the year 1958. It is the largest Chamber of this country at least in
terms of membership strength. DCCI has its training cell. Besides, a training
institute in the name of DCCI Business Institute (DBI) has been initiated.
The Dhaka Chamber of Commerce and Industry (DCCI) acknowledged that in
Bangladesh women live within the constraints of a conservative society where
men are the customary bread earners. Apart from the domestic duties, women
have, however, to shoulder a major part of the economic burden of the society to
share family expenses. The DCCI assumed that most of the constraints deterring
economic Empowerment of the women are lack of access to economic resources,
including credit, absence to support services, better training and skills, limited
access to power and lack of access to larger quantum of resources. So, initiated
two projects one is TIPS and the second the DCCI-CIPE, ERRA Project
supported by the US Chamber of Commerce, Washington, D.C., USA.
The constitution guarantees all citizens equal rights, which is also reflected in
national policies and plan documents. However, in reality, there are some
disparities between men and women, rich and poor and rural dwellers in access
to the development process both as agents and beneficiaries.
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Social perspectives and overall situation has been facing a lot of changes now a
day. Women participation in all sectors has increased over the last two decades.
In response to the demand of different pressure groups and by disruption of the
socio-economic scene resulting from macro processes, women's economic role
has expanded considerably.
7.6. Jat iayo Mohila San gsth a (JMS)To further social, economic, educational and cultural uplift of women, Jatiyo
Mohila Sangstha (The National Women Organization), was established in 1976.
Its objective was to protect the rights of women and children and empowerment
of women. However, it has undertaken various skill development training and
micro-credit operations, which support entrepreneurship development of the
women population of the country. The programs are conducted using
government grant funds. As a part of its activities, Jatiyo Mohila Sangstha has
initiated a project with the assistance of UNDP to assist potential womenentrepreneurs, which covers all the 64 districts under the name
"Entrepreneurship Development of Women". Main objective of the project,
however, remain alleviation of poverty amongst women through training, credit,
information and marketing support.
The project was initiated in July 1998 initially for five years with a target to
support 7000 rural women. The project supports those who are beneficiaries of
micro-credit programmes of the Department of Women Affairs, Jatiyo Mohila
Sangstha, Department of Youth Development and other public agencies. The
project also aims to link the beneficiaries with institutional credit. The credit
limit is Tk 30,000 to Tk 1,50, 000.
Before extending credit, Jatiyo Mohila Sangstha arranges management training
through contracting other mentioned agencies. The project is new and the
effectiveness cannot be judged now but it can be easily understood that the
project cannot provide comprehensive support to the entrepreneurs in the real
sense of the term and the credit amount is not enough to establish a reasonable
size of enterprise. This has also its limitation to manage and operate such a credit
program because of not having its own credit staff at the field level.
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8.Problems Faced b y the Bank ers to p rovide cr edit towomen Entrepr eneurs
Communication gap between the women entrepreneurs and the banks. Lack of loan security Women entrepreneurs are not aware to provide required information to the
banks
Business experience of the women is very poor Loan size demanded by the women entrepreneurs are very small Find out the actual entrepreneurs, i.e., lack of information about the real
entrepreneurs
Lack of confidence in women entrepreneurs. Lack of manpower and logistic support by the banks. Lack of confidence upon women entrepreneurs Fixed interest rate (10%) for Islamic Banking system Lack of family support to the women entrepreneurs Lack of management skill Women entrepreneurs are not well approaching to business Lack of legal documentation In most of the cases women are doing informal type of business Difficult to appraise the proposal Criteria fulfillment of getting refinance from Bangladesh Bank Lack of marketing drive by the women entrepreneurs. Women entrepreneurs have not sufficient experience to prepare loan
proposal
Reluctant to provide papers, i.e., cash out flow statement, cash inflowstatement, etc.
Normally women are not coming to the banks for loan. Women are afraid about banking procedures to get credit facilities. Advertisement for financing to women is not sufficient.
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9.Remed ies to over come pr oblems Attitude should be positive to women entrepreneurs Organize training for SME women entrepreneurs Information needed by the women entrepreneurs for getting loan should be
available by the concern bank, Bangladesh Bank and SME Foundation.
Assist the Women entrepreneurs to prepare loan documents Launching collateral free product for the SME women entrepreneurs Change mind set of the management (top) in Bank Loan disbursement process should be easier Create confidence in women entrepreneurs by providing more finance Women should come forward with more enthusiasm Offer incentives to the bank to finance women entrepreneurs Formulate policies to finance women entrepreneurs Provide counseling and guidance to the women entrepreneurs Relation building with banker's and entrepreneurs FIs should keep their door open for the women entrepreneurs Government should take some actions to make the process of getting loan
easier for women entrepreneurs
Private bank management should emphasis to the corporate socialresponsibilities
Bankers should provide advisory services to women entrepreneurs Bank should go to the potential women entrepreneurs for financing Extending credit facility based on project cash flows. Requirement of audited balance sheet from the party needed 40 lacs taka as
loan should be exempted.
Format should be written in Bengali for SME loan.
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10 . Opportunities to Provide Credit to WomenEntrepreneurs
There are some special schemes for women entrepreneurs in each and everybank.
Women entrepreneurs are creative and committed to their business. It is a big sector with diversified business area.Credit repayment by the
business women is higher than the business man.
More women are coming to business line, so the market size is expanding. Women are hard working. The have better opportunity for business development. Women empowerment movement helps to change of womens thinking to
business.
It is an untapped market. Women entrepreneurs may be big client of a bank in future.
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11 . ConclusionWomen entrepreneurs constitute less than 10% of the total business entrepreneurs
in Bangladesh whereas women in advanced market economies own more than 25%
of all businesses. It is heartening to note that despite many barriers, a new women's
entrepreneur class has arisen in the country taking on the challenge to work in amale-dominated, competitive and complex economic and business environment. Not
only have their entrepreneurship improved their living conditions and earned more
respect in the family and the society, but they are also contributing to business and
export growth, supplies, employment generation, productivity and skills
development of the country. A recent United Nations report concluded that
economic development is closely related to the advancement of women. "In
countries where women have advanced, the economy has usually been steady. By
contrast, in countries where women have been restricted, the economy has been
stagnant."
Women's entrepreneurship is not an easy task. "Becoming an entrepreneur is an
evolution of encountering, assessing, and reacting to a series of experiences,
situations, and events produced by political, economic, social and cultural changes."
Given the complexities in the social environment and administrative structure,
women's entrepreneurship in Bangladesh is more challenging. Many social and
operational constraints continue to restrict women from starting and running
economic enterprises. Apart from the family and social barriers against the mobility
of women, the operational barriers such as lack of access to capital, lack of training
facilities for skills development, lack of business services, lack of business data,
complex banking procedures and collateral requirements, etc. continue to criticallylimit their progress.
Entrepreneurship is the driving force to bring about excellence in production,
market innovation, human resources and skills development, social mobility, and
changes in the attitude of people. Development of women's entrepreneurship offers
excellent opportunities for development of one half of the population and for overall
socio-economic progress of the country. Women's entrepreneurship indeed can
bolster economic autonomy of women, promote gender balance and ultimately can
lead to participation of women in broader decision making processes of the country.
This study can conclude that the credit worthiness of the women entrepreneurs are
increasing as a result of the government initiatives, role of SME Foundation,
activities of the different trade bodies, products/services offering by the Financial
Institutions especially by the commercial banks, and more importantly change in the
mind set of society in favor of the actual and potential women entrepreneurs.
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