The Financial Express

Encouraging women entrepreneurship

| Updated: September 06, 2019 21:06:25

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Encouraging women entrepreneurship

Trade has assisted in lifting millions of people out of poverty. As such trade can also act as a driver in terms of poverty reduction for women and lead to women's economic empowerment.

Trade leads to creation of job opportunities for skilled workers. In developing countries, women tend to be less educated compared to men leading them to incur greater constraints as compared to men in terms of access to foreign markets. When women are provided with the same opportunities as men, it leads to improvements in competitiveness and productivity and this, in turn, accelerates economic growth and poverty reduction.

However, trade policies cannot be the solution to all forms of gender issues.

In a male-dominated society, women struggle to get out of their cocoon and tread on the path of entrepreneurship. A very negligible portion of the business owners are women -- only 10 per cent (Economic Census, 2013).

 Previously, resourceful women used their own money to pursue their dreams and set up their own businesses. The scenario is changing gradually. Women from not well-off households and with low levels of education are now establishing their own businesses - mostly small and medium enterprises (SMEs) - with support from microcredit programmes. Along with national and international non-governmental organisations (NGOs), the Bangladesh government is providing various supports and training to create an entrepreneur-friendly environment for women.

Women encounter a number of barriers when it comes to participation in micro, small and medium enterprises (MSMEs) in international trade. Women-run businesses remain vulnerable to fixed trade costs and are smaller in size.

Women are subject to laws and regulations that are to a certain extent discriminatory and such barriers include cultural biases. Access to finance remains one of the most pressing issues for women entrepreneurship. Women encounter gender-specific discrimination that makes it difficult for them to arrange formal financial assistance.

In South Asia, less than 10 per cent of commercial credits are received by women (Haq, 2000). Recent findings indicate that women entrepreneurs start new business with significantly lower capital than their male counterparts do. Women are denied access to finance and are subject to discriminatory behaviour of bank officers and gender stereotypes that the women will not be able to pay the loan in due time.

Huge collateral requirements and high interest rate act as hindrances to woman entrepreneurs. Majority of women entrepreneurs start their business with their personal savings and as a result, are handicapped by inadequate capital supply.

There are barriers also in terms of unequal economic opportunities and inequalities that include access to productive inputs covering credit, land, and technology. Women have limited bargaining power as well that is aggravated by problems in importing raw materials and the struggle for searching for investors to finance raw materials and machinery.

However, female labour force participation in Bangladesh has increased over the years. Women are encouraged to opt for jobs with secure income, fixed salaries compared to choosing an uncertain career like business. Conflicts in the family over women's career act as barriers to women entrepreneurship.

In Bangladesh, due to patriarchal mindset, the literacy rate of girls tends to be lower. According to the UNESCO, the literacy rate for boys is around 77 per cent while it is less than 70 per cent for girls. The scope of education for girls is lower.

For a business to function effectively, managerial and technological skills are essential, but for lack of limited access to vocational training facilities, women find it very difficult to start their own business and run it efficiently.

Overall, there is a serious deficiency in training facilities for new entrepreneurs to make them skilled and knowledgeable for running their businesses smoothly. It has been observed that patriarchal attitude towards women stand as a key obstacle to women's leadership in business organisations.

Women entrepreneurs from rural areas face challenges when it comes to marketing their products. Due to transportation crisis, they are forced to sell their products to wholesalers from Dhaka at low prices.

Information asymmetry, lack of knowledge of the market price, weak bargaining capacity and high costs of maintaining new business contacts hinder their growth.

Inclusive trade policies leave no one behind. Appropriate policies will help bridge the gender divide in trade and foster women's development.

Women are under-represented in the country's trade organisations. As a result, women's voices remain meek and they fail to raise issues for the betterment of women entrepreneurship.

Sunera Saba Khan is a Research Economist, SANEM

Fahmida Haq Majumder is a Research Associate, SANEM

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