'Using IP as collateral for financing requires awareness, strategic guidelines'

Using intellectual property (IP) like patent, trademark or industrial design as collateral to get bank loans opens a window of opportunity for women entrepreneurs in the country.

To tap the opportunity, women entrepreneurs and traders need to be aware of the IP protection of their products. At the same time, policymakers need to provide necessary policy and infrastructure support.

Women business leaders and experts at a panel discussion on ‘Women Entrepreneurship and IP in Bangladesh: Challenges and Way Forward’ in Dhaka on Tuesday made these observations.

“As financing is always a barrier to women entrepreneurs in the country, the legal provision to use IP as collateral to secure bank financing can be a solution to access to finance,” said Ms Rubaba Dowla, the country managing director of Oracle Bangladesh.

“It will also encourage entrepreneurs to go for new innovations and product diversifications,” she added.

Drawing a big picture regarding the IP, Rubaba opined that IP is an effective tool to facilitate the country’s process of graduation from the Least Developed Country (LDC) category.

“Through the intellectual property rights we can foster innovation,  reduce the knowledge gap with the rest of the world and become a competitive player in the global value chain,” she added.

Rubaba was of the view that as the country’s informal sector is still quite big and mostly women-dominated, it is critical to ensure the legal recognition and protection of the small traders of the sector.

“In the absence of legal protection, big firms may exploit them,” she cautioned. 

Taking part in the discussion, Barrister Sharmin Akter said that though there is now a law to use the IP as collateral for bank financing, a number of challenges are also there to make use of it effectively.

“Valuation of IP is a challenge and it requires strategic guidelines to do so,” she added. “Making a valuation of a trademark or brand name now varies as different companies value their respective IP differently.”

Sharmin, an advocate of Bangladesh Supreme Court, also suggested that building a supporting ecosystem by financial institutions is necessary so that women entrepreneurs can access the financial and legal advice in case of using the for collateral.

It is to be noted that the national parliament in October last passed the Secure Transactions of (Moveable Assets) Bill, 2023 aiming to bring movable property under the definition of collateral for bank loans.

As a result, not only immovable property, but also fixed deposits or movable property like gold, silver, and intangible assets like intellectual property can be used as collateral for getting loans from banks and financial institutions.

Taking part in the discussion, Selima Ahmad, President of Bangladesh Women Chamber of Commerce and Industry (BWCCI), said that the complex procedure to get the IP registration is a big hurdle to tapping the long-term benefit of getting the IP protection.

“There is no doubt that IP will ultimately bring a huge benefits for the women entrepreneurs in the long-run,” she said. “A good number of women are working to develop something unique and innovative and for they need the IP recognition and protection.”

“But, the current process is not easy especially for women who have developed their own small business and entrepreneurship across the country as they have little understanding of the complex legal procedure of IP,” she continued.

In this connection, the women business leader stressed proper implementation of various policies supporting women entrepreneurship.

She also underscored addressing the social, economic and bureaucratic difficulties as well as ensuring the gender-friendly approaches.

Ms Alexandra Bhattacharya, Manager, Office of the Deputy Director General, Regional and National Development Sector, WIPO, conducted the panel discussion.

The discussion took place as a part of three-day project closing event titled ‘Use of Intellectual Property Tools by Women Entrepreneurs in Bangladesh for Generation of Product Value and Economic Growth.’ The project was launched in June last.

The World Intellectual Property Organization (WIPO), based in Geneva, in cooperation with the Ministry of Foreign Affairs, Ministry of Industries and the Department of Patents, Designs and Trademarks (DPDT) organised the three-day event where 25 women entrepreneurs across the country participated.

At least seven trademarks were developed under the project for seeking IP registration. 16 strategic areas were also identified to support the women entrepreneurs.

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