Women Entrepreneurship in Bangladesh

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Women entrepreneurship in Bangladesh: problems and prospects


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Introduction

Bangladesh is a developing country positioned in South Asian region. Per capita national income is

US$ 865 and which is far lower in rural areas. Aout 5!" of the population falls elow income

poverty line. #omen can e involved in usiness activities of entrepreneurship where they can

contriute directly to their family and the economy. #omen are nearly half of the population whichmeans there is a huge potential to e utilied for the socio%economic development of the country.

All who are concerned gradually have realied that a society cannot afford to waste nearly half of

its human resources discriminating on gender issue. &his rising awareness on the part of the

government has led to implementation of national policies to facilitate a development process

involving women in all spheres particularly on economic activities focusing especially on

entrepreneurship development. 'ntrepreneurship has ecome an important profession among the

women of Bangladesh a different levels of the society. According to the U()P *uman

)evelopment +eport ,-!!/0 a woman entrepreneur is defined as a woman who has alone or with

one or more partners started or inherited a usiness0 and is eager to ta1e financial0 administrative0

and social ris1s and responsiilities0 and participate in the day%to%day management activities. 2n

present gloal economy participation of women is essential to reduce poverty0 play their active role

in the economy and contriution in the 3)P. But implementing these has some prolems% the

prolems and challenges faced y women entrepreneurs. 2n the conte4t of Bangladesh0 in fact0

women entrepreneurship development is a challenging phenomenon as women are lagged ehind

economically and socially compared to men. 2n Bangladesh women are victimied more ecause of

their illiteracy0 deprivation0 lac1 of 1nowledge0 unorganied0 powerless or less political

representation0 rigid social customs0 and inustice y their counter partners particularly in rural

areas. &hese challenges should e faced to flourish the development of women entrepreneurship. 2t

is clear that women entrepreneurship development is a precondition of all sorts of a national

development. #oman entrepreneurship development is the 1ey variale which connects socio%

cultural environment with economic development rate.

Objectives of the Study

&he main oective of the study is to identify the maor arriers and challenges as well as

the prospects of women entrepreneurship in Bangladesh.

&o have an overview of present state of women entrepreneurship and ma1e some

recommendations to overcome the prolems.


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Women Entrepreneurship Scenario in Bangladesh

Bangladesh is a densely populated country with limited resources and higher social stratification.

(early half of the populations are women ,se4 ratio !6/. Since few women participate in the

mainstream of economic activities0 the enormous potentiality of the population is unutilied. 7or

instance0 only 6" of women are self%employed out of 66" self%employed citien ,ased on

entrepreneurship status/. 'ncouragingly0 there is a rising of a new class in rural Bangladesh0 they

are the women entrepreneurs who have accepted the challenges of life and have emerged as leaders

in the socio%economic development0 thus earning for themselves and for their families and

contriuting towards the socio%political upliftment of women. onse9uently0 entrepreneurship has

ecome an important profession among women in oth rural and uran areas. #omen in uran

areas are engaged in different small and medium usiness enterprises e.g. handicrafts0 fashion

house0 parlor0 home te4tile0 food0 cooperatives0 chain shops0 2& even to large usiness to some

e4tent. +ural areas are eing self%employed through the agricultural and nonagricultural sector0 as

entrepreneurs. &hese activities are cropping0 rearing livestoc1 and poultry0 fish farming0 nursery and

tree planting0 tool ma1ing0 handcrafting0 food processing0 tailoring0 rice processing0 etc. But it is not

so easy to operate these usinesses as they are engulfed with numerous prolems that act as arriers

to the growth and e4pansion of women entrepreneurship.

Problems Faced By Women Entrepreneurs1. Access to Finance & Financial Institutions

2n Bangladesh women entrepreneurs face various hindrances to access to finance. 2nsufficient initial

capital is one of the main prolems for the women entrepreneurs in Bangladesh. Particularly0 when

a new venture is estalished0 e4tensive difficulties is faced y then in accessing credit. #omen in

South Asia are virtually invisile to formal financial institutions% they get paid less than !" of

commercial credits. Similarly0 gender%ased ostructions0 for e4ample0 conventional thin1ing0

culture and social values0 lac1 of collateral : all e4acerate the intricacies encountered y women.*igh transaction costs0 the rigidity of collateral re9uirements and heavy paper wor1 are further

hindrance to women entrepreneurs 2n other words0 lac1 of capital0 higher interest rates0 lac1 of

e4perience and information0 lower investment and unavailaility of facilities li1e usiness premises

or other apparatus0 often hamper the progress and e4istence of enterprises handled y women

entrepreneurs.

2. Lack of Knowledge

;ac1 of 1nowledge among the women entrepreneurs is another arrier.


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management0 environment0 entrepreneurship0 economics and policy are important in todays

usiness.

3. Lack of Training

)ifferent arriers are also created y the surrounding society to the development of their

potentiality ,li1e 1nowledge and s1ills/ through training oth vocationally and technically. A study

,USA2)0 -!/ has revealed that female entrepreneurs are repeatedly mistreated and given fewer

opportunities y the male community to uild up their entrepreneurial s1ills to run their enterprises

smoothly in rural areas in Bangladesh.

4. Lack of Entrepreneurial Training

7or processing0 manufacturing0 livestoc1 and fisheries activities entrepreneurial training is essential.

But such training facility is availale in uran areas. ;ac1 of necessary training0 lac1 of e4perience

severely affects the efficiency of the rural women entrepreneurs. 2t negatively affects the opening of

a new usiness segment. >pportunity for entrepreneurial training has increased significantly. But

such opportunities are e4tended mainly to uran areas.

. Fa!il" #esponsi$ilities

7amily responsiilities such as household wor10 caring for elders and rearing children prevent them

from gaining s1ills0 1nowledge properly since they cannot usually find the suitale time to e more

proficient.


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entrepreneurs fre9uently face troulesome difficulties in running their small and medium

enterprises ,Ss. Although several (3>s are

coming forward lac1 of proper guideline hampers their e4pansion in micro0 small and medium,S


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11. Lack of upport er0ices

#omen entrepreneurs in Bangladesh in rural areas usually do not have access to appropriate

cooperative or support services from the appropriate authority. 2n another study of U()P0 this

generates social0 cultural and economic hurdles which indisputaly have a direct effect upon their

product 9uality and thus income

12. A$sence of #& to I!pro0e +roduct ualit"

Another ostacle for e4pansion of women entrepreneurship is asence of research and development.

+esearch and development is done to improve 9uality of e4isting products0 innovating new

products. 2n Bangladesh women entrepreneurs in micro0 small and medium ,S


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'stalishing a separate an1 to ensure easy access to industrial credit0 e9uity capital0 venture

capital0 and wor1ing capital0 collateral free loans.

Providing financial support and in cases arranging necessary capital.

3. upporting er0ices of Financial and 6redit Institutions3enerally0 financial institutions and an1s e4tend credit for women under micro%credit program for

poverty reduction. &he interest rates of this credit vary ased on the cost of the fund. 7or this

purpose0 mainly donor supported proect funds are used0 though some funds are also provided y

Bangladesh Ban1. &he Bangladesh Ban1 directs the commercial an1s to lend at least 5 percent of

their lending capital for the industrial sector0 while 5 percent are e4pected to e spent for the small

scale industry ,S2/ sector.

4. 5o!en Entrepreneursip e0elop!ent +rogra! 75E+"

&he #')P0 initiated y the BS2 with USA2) assistance0 is concerned with various activities0 such

as scouting for potential female entrepreneurs? providing proect appraisals on their ehalf? pre%

investment counseling? loan arrangements for fi4ed and wor1ing capital? post%investment

counseling and regular supervision? supply of modern designs and prototypes? special management

and s1ill improvement training? and0 where necessary0 mar1eting and technical assistance.

. (icro8Industries e0elop!ent Assistance and er0ices 7(IA9


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). 5o!en Entrepreneurs: Association 75EA9 ;anglades

&he main oective of #'A is to create awareness and an enaling environment for women

entrepreneurship development y providing memers with lin1age of support service organiations?

promoting female entrepreneur products? sharing successful e4periences of entrepreneurs at home

and aroad? training and consultancy services and dissemination of information concerning

availale support services ,training0 credit0 mar1eting channels0 technology0 etc./? liaison with

similar organiations in other countries? and research on related issues.

#ecommendations

#omen entrepreneurs can play a vital role in comating rural poverty. &he emergence and

development of women entrepreneurship largely depends on the supporting conditions of different

factors such as economic0 social0 cultural0 and psychological. &o improve the socio%economic status

of the women in Bangladesh it is necessary to formulate appropriate policies0 ta1e necessary actions

and introduce effective measures to integrate the women in the mainstream of the development

process. &herefore0 the following recommendations may e considered worthwhileD

$% Financial Policies and Strategies&

2n respect of the policy0 strategy and function of Bangladesh Ban1 and ommercial Ban1s

following recommendations may e madeD

2dentification of viale women entrepreneurs.

'stalishing credit guarantee scheme for women entrepreneurs.

Sin1ing interest rate for loans for women entrepreneurs.

Setting up special window for financing women entrepreneurs.

Pre% and post investment counseling for women entrepreneurs for credit.

Allocation of women share in e9uity development and fund.

Preferential treatment of the women entrepreneurs y credit in thrust sectors.


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2% 'ounseling and support services

&here are following counseling and support services should e estalished to facilitate women

entrepreneurship in BangladeshD

redit programs need to e lin1ed with entrepreneurship development training

programs.

;ending procedures must e simplified0 with minimum documentation formalities.

Special provisions should e made for female entrepreneurs.

(% Other Suggestions

&a4 holiday for women entrepreneurs should e e4tended further and made more supportive

for them.

3ift &a4 should e dismantled in the case of women eneficiaries. 'ither the registration procedure for import and e4port usiness should e simplified and

made women friendly or completely dismantled.

All anomalies in custom procedure must e removed and women friendly.

&ariff for women entrepreneurs should e aolished.

Ealue Added &a4 ,EA&/ for women entrepreneurs should e aolished.

'onclusion

#omen entrepreneurship is not only a way of attaining economic freedom ut also a source of

generating income and employment. Bangladesh government recogniing the importance of women

entrepreneurship has ta1en several initiatives to encourage women getting involved in diverse

micro0 small and medium enterprises ,s support is needed

to solve the e4isting prolems of women entrepreneurship development. 2f it can e ensured0 it willpave the way for the emergence and development to women entrepreneurship in Bangladesh. &hese

measures will not only contriute to national economy consideraly ut will also contriute socio%

culturally and economically in development and growth of women entrepreneurs significantly.

Documents

Women Entrepreneurship in Bangladesh