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The Financial Express

Thrust on gender-neutral credit programme


Thrust on gender-neutral credit programme

Women entrepreneurs have, indeed, come a long way despite facing social and economic barriers. Now they need policy support and more budgetary allocation, which will lead to development of entrepreneurship in Bangladesh.

There is no denying that women have significant contribution in bringing success to the country's apparel exports. Many Bangladeshi female designers are working with world famous brands but the people are in the dark about their success stories.

The country's women entrepreneurs could hardly promote their products in foreign markets. Opportunities should be created for them so that they can grow. Lack of finance is still a major challenge for women entrepreneurs although the situation is gradually improving, thanks to some policy measures taken by the central bank.

The fact remains that social barriers are still prevailing as banks ask women entrepreneurs to make their husbands guardians and guarantors. This creates many problems for them to move with their business.

Every year the government allocates Tk 2.0 billion for women entrepreneurs but the fund remains unspent. As such, the government can create a guarantee scheme of Tk 2.0 billion in the budget to make the fund usable.

Many associations of women entrepreneurs have been developed and all those should collaborate with each other so as to have a strong voice. The government should extend policy support and more budgetary assistance to develop female entrepreneurship.

Many women entrepreneurs have graduated into large entrepreneurs in the past 25 years. The Women Entrepreneurs Association (WEA), in its over two decades of journey, has been promoting female entrepreneurs in various sectors including readymade garments, ornaments and jewellery, handicrafts and handloom.

The association also does run advocacy programmes for creating favourable business environments for women entrepreneurs. The WEA has taken initiatives to connect its members with the global market.

Meantime, the National Board of Revenue (NBR) is reported to have held talks with the central bank to find a suitable mechanism of giving collateral-free loans up to Tk 2.5 million to the women entrepreneurs.

It is, no doubt, a good gesture for those women who are willing to make a mark in the country's business arena. There are problems too for women to be successful entrepreneurs at ease. Before giving loans, the lenders generally ask them about their husbands' identity for various purposes. Such a practice does not augur well for them.

Statistics show the rate of loan default cases is minimal among the women borrowers. This has encouraged the NBR to initiate steps to ease doing business by woman entrepreneurs. The government appears to be very positive in ensuring more facilities to women entrepreneurs in the budget due to their relatively lower loan default rate.

Social barriers and a lack of access to finance - the two big obstacles for women to become entrepreneurs -have eased somewhat in the last 8-9 years. A recent survey says social norms and attitude towards women becoming entrepreneurs have improved between 2009 and 2018. It says women face social and family problems just because they are women. It is difficult to solve these problems overnight, said the survey report.

The women entrepreneurs are still dependent on their families and husbands to run their businesses. But urban women appear to have higher capacity to run businesses individually compared to rural entrepreneurs. The dependency is higher in case of raw material collection and marketing of the products.

Many female entrepreneurs say the current SME loan amount is inadequate. About 39 per cent of female entrepreneurs complained about high interest rate and 35 per cent about insufficient credit limit. They also face problems in accessing finance.

In the circumstances, there is a need for a more gender-neutral credit programme and adequate amount of loans for women entrepreneurs along with a grace period for repayment.

 

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