Published in The Independent on Wednesday, 14 May 2014.
23pc of commercial loan goes to SMEs
Abu Sazzad
About 23 per cent of the country’s total commercial loan, disbursed by the financial institutions, in last year went to the Small and Medium Scale Enterprises (SMEs), said a survey conducted by the Centre for Policy Dialogue (CPD). Of the total SME loan portfolio, only 3.2 per cent loan was disbursed among the women entrepreneurs, said CPD research director Fahmida Khatun who conducted the research with a view to identifying the challenges the women entrepreneurs facing to run their business.
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 research director said that 54 per cent women entrepreneurs are involved in trading business, 28 per cent engaged 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 was a problem they were facing to get the 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. Findings show that 86 per cent of the entrepreneurs opined that the interest rate should be lowered and only 14 per cent opined that the existing interest rate is affordable. 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 the loans, also mentioned the CPD report. Talking to The Independent, the former president of Bangladesh Women Chamber of Commerce and Industry (BWCCI) Selima Ahmed 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, said the BWCCI president. But the desks, she claimed, are not performing accordingly.
“Of course there are some lapses even among the women entrepreneurs to avail the loan mainly due to lack of knowledge about the banking procedure,” said BWCCI president urging all to help women entrepreneurs to promote their business which ultimately help attain a vibrant economy.
Talking to this correspondent, the Bangladesh Institute of Bank Management (BIBM) SME consultant, Sukumol Sinha Chowdhury also underscored the need for a specific guidelines for banks to disburse the loan among the entrepreneurs.
Banks have undertaken several initiatives to encourage county’s women entrepreneurs to avail the loan since inception of the central bank’s SME department, said the SME consultant.
He suggested the government, the central bank, financial institutions and SME foundation to take more proactive initiatives to promote the women entrepreneurs for boosting economy.