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CPD study on women entrepreneurs and access to finance cited

Despite several national policies and institutional measures, access to credit by women entrepreneurs in Bangladesh is not satisfactory. According to the survey, the highest amount, 71.54 per cent, loan were received by women entrepreneurs from Dhaka followed by 18.46 pent from Gazipur, 6.92 per cent from Narayanganj and 3.08 per cent from Savar.

 

Published in The New Nation on Tuesday, 8 September 2015.

Women entrepreneurs need more access to finance
Out of the total SME loan portfolio, only 3.2 pc disbursed among them last year

Abu Sazzad

The Founder President of Bangladesh Women Chamber of Commerce and Industry  (BWCCI) Selima Ahmed has underscored the need for strengthening access to finance for women entrepreneurs with a view to attaining sustainable economy and reducing economic disparity from the society.

When talking with the reporter of the New Nation the BWCCI president said, “If we ensure more credit access for women entrepreneurs across the country, it would help empowering themselves in the society as well as boosting the economy”. Currently, the private commercial banks (PCBs) and state-owned commercial banks (SOCBs) are allocating SME loan to the women entrepreneurs according to the instruction of the central bank but it’s not sufficient against the demand of the entrepreneurs, Selima Ahmed lamented.

On the other hand foreign commercial banks (FCBs) and non-banking financial institutions (NBFIs) did not comply with the central bank’s instructions for disbursing their yearly targeted amount, she claimed. As the PCBs and NBFIs have not sufficient branch in the rural areas, they can make a liaison with the micro-credit financial institutions (MFIs) to disburse their SME loan in favour of the women entrepreneurs across the country, she suggested. She urged the central bank to monitor the matter strictly so that the FCBs and NBFIs can fulfill their yearly disbursement target.

The BWCCI leader claimed that country’s women entrepreneurs are facing multifarious difficulties to avail the SME loan from the financial institutions. Most of the banks have women dedicated desk to promote women entrepreneurs, but the desks are not performing accordingly.

“Of course there are some lapses among the women entrepreneurs to avail the loan mainly due to lack of knowledge about the banking procedure,” said the BWCCI president urging all to help women entrepreneurs to promote their business which ultimately help to attain a vibrant economy.

CPD Research Director Fahmida Khatun said that about 23 per cent of the country’s total commercial loan, disbursed by the financial institutions, only 3.2 per cent loan was disbursed among the women entrepreneurs.

She conducted a research for identifying the challenges the women entrepreneurs are facing. The survey carried out among 129 women entrepreneurs from Dhaka, Savar, Gazipur and Narayanganj, suggested for enhancing women access to a developed SME infrastructure and setting up help desks at banks to reduce the problems faced by the women entrepreneurs.

Despite several national policies and institutional measures, access to credit by women entrepreneurs in Bangladesh is not satisfactory. According to the survey, the highest amount, 71.54 per cent, loan were received by women entrepreneurs from Dhaka followed by 18.46 pent from Gazipur, 6.92 per cent from Narayanganj and 3.08 per cent from Savar.

The CPD director said that 54 per cent women entrepreneurs are involved in trading, 28 per cent in manufacturing sector and 18 per cent in service industry. Approximately, 17 per cent of the surveyed entrepreneurs were found not to keep any financial statement of their business.

About 54 per cent of the women entrepreneurs took loan from the BRAC Bank, about 8.46 per cent received loan from the IFIC Bank and 10 per cent of the entrepreneurs received loan from other financial institutions, said the report.

The research also disclosed that 69 per cent of the entrepreneurs reported that they are facing problems in getting loan and 45 per cent entrepreneurs said that bank people were not cooperating. About 37.5 per cent said that collateral or mortgage is a problem for getting loan.

Majority of the respondents feel that the interest rate on their loans is too high which is hampering their business and should be reduced. About 73.08 per cent women entrepreneurs think that the banks take too long time for processing the loan request.

Lack of knowledge and gathering information is another obstacle to credit access for women entrepreneurs which also consume an unusual span of time. It is also difficult for entrepreneurs belonging to lower middle class group to provide collaterals for sanctioning loans, also mentioned the CPD report. Talking to this correspondent, Bangladesh Institute of Bank Management (BIBM) SME consultant, Sukumol Sinha Chowdhury also underscored the need for a specific guidelines for the financial institutions to disburse the loan among the women entrepreneurs.

Banks have undertaken several initiatives to encourage county’s women entrepreneurs to avail the loan since the inception of central bank’s SME department, said the SME consultant.

He urged the government, central bank, financial institutions and SME foundation to take more proactive initiatives to promote country’s women entrepreneurs for boosting economy.

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