Published in The Independent, on Wednesday, 7 January 2015.
Capital, gender-biased environment main hurdles to women entrepreneurs
Kaniz Fatima
A few years back, Bilkis Ahmed Lily lost her husband and was depressed thinking what to do and how to run her family. Finding no other way, the bachelor degree holder decided to start a clothing design business by investing Tk. 3 lakh which she borrowed from one of her relatives. Lily had to face a lot of hurdles to operate the business as she had no experience or training. She was unable to make profit, lacking business knowledge and network.
Later, Lily took part in various project activities like business development and business management, product development, business communication, business counseling, organised by the Bangladesh Women Chamber of Commerce and Industry (BWCCI). She was also able to network with other women entrepreneurs around the community, as well as bankers for getting loan.
By developing her skill, Lily learnt how to operate a business and become a successful women entrepreneur. She is busy expanding her business with creative designs, craftsmanship and modern approach.
She has a shop where 10 permanent staff and 16 workers are involved in her home-based factory for making products. She is at present the owner of the showroom Anchal Boutique in Barisal division.
Lily was given the best women entrepreneur award in Barisal division by the Bangladesh Women Chamber of Commerce and Industry (BWCCI) in recognition of her success.
Like Lily, many Bangladeshi women operate businesses and run their family. If they get proper training opportunities, product development and marketing facilities, their businesses can flourish and they can contribute to the country’s economy.
Women in the country are now more economically independent, representing 36 per cent of the country’s workforce. But they are held back mainly due to lack of assistance and access to capital and the gender-biased environment.
Bangladeshi women have a lot of potential, but they need support to set up their own businesses and flourish. They also need to ensure that at every stage of a woman’s career she has the opportunity to develop skills, and to get a gender-friendly business environment. If these are provided, the hidden talent can be unearthed, said women business leaders.
Selima Ahmad, president of the Bangladesh Women Chamber of Commerce and Industries, said: “Bangladeshi women have entrepreneurial skills. Everyone cannot be an entrepreneur, but many can be.”
When it comes to finance, women face the first hurdle. Access to capital is the main barrier for women to start a business like trading and manufacturing, said Selima, who is also the vice chairperson of Nitol Niloy Group.
“As a highly populous country, Bangladesh needs more women entrepreneurs. A woman entrepreneur creates employment opportunities for others and also pays taxes if she earns over Tk. 3 lakh. So, if we can develop more women entrepreneurs, the unemployment rate will come down and the government would earn more revenue,” said the women chamber chief.
“We can bring more women into the business sector through entrepreneurship development by providing them knowledge, by developing their skill, giving them market access and bringing a favourable gender-friendly environment. If we can do this, women will come forward,” she added.
“If we want Bangladesh to become a middle-income nation, the number of women entrepreneurs would have to be 25 per cent. The country would not develop if we cannot use the full resource. We have to consider women as assets,” said Selima.
Despite several national policies and institutional measures, access to credit for women entrepreneurs in Bangla-desh is not satisfactory.
Recent statistics of Bangladesh Bank show that 22.95 per cent of all commercial credit from the financial sector has been disbursed as SME loans.
However, only 3.2 per cent of the whole SME loan was given to women entrepreneurs.
According to the World Econo-mic Forum 2013, the labour force participation rate for women in Bangladesh has been increasing and is the highest in South Asia, but it is lower than men.
According to the BBS, agriculture remains the dominant employment sector for women (64.84 per cent) in Bangladesh, followed by manufacturing (11.77 per cent), self-employment (16.8 per cent), and community/personal services (10 per cent). Only 3.25 per cent of all working women are employed by the government, against 8.25 per cent of working men.
Women need some prospect to maximise their talent and career development as men. Women entrepreneurs in Bangladesh face both formal and informal barriers.
Ayesha Khanom, president of the Bangladesh Mahila Parishad, said the main barrier faced by women entrepreneurs is access to capital. Women in the country don’t have proper rights both in cases of movable and immovable properties.
When it comes to finance, women face hurdles mainly due to the ingrained gender bias. A recent study on “Access to Credit by Women Entrepreneurs in Bangladesh: Challenges, Obstacles and Way Forward”, conducted by Fahmida Khatun, research director, Centre for Policy Dialogue (CPD), shows that 69 per cent of the surveyed entrepreneurs face problems in getting loan. Forty-five per cent of the entrepreneurs said that bank people were not cooperative.
Most commercial banks have introduced SME products.
Some of them are exclusively for women entrepreneurs with lower interest rates and flexible repayment periods. But due to lack of information, rural entrepreneurs remain unaware about the services of banks.
The study found that out of 129, about 97 per cent entrepreneurs (126) started their business with own resources. Fifty-five per cent entrepreneurs thought that lack of security and guarantors are the major problems in obtaining finance from banks/financial institutions.
Findings of the study also show that 86 per cent of the entrepreneurs opined that the interest rates should be lowered. It recommends reducing interest rates, stringent collateral requirements and easier loan procedure.
Mousumi Akter runs a home-based business in Jessore. She takes orders from various boutique shops mainly located in Dhaka. She has some contractual workers and with their help she carries on the work and supplies them to buyers.
“I face problems to run the business from my house, but I don’t have enough capital to rent a shop in the market to run the business. I tried to take loan form banks but found it hazardous,” Mousumi said.
The study recommended facilitating women’s access to domestic and export markets, promoting women’s businesses and their products, providing a range of training opportunities addressing a number of marketing issues for women entrepreneurs, and providing access to information technology and other means of accessing marketing information.
Selima said another main problem to flourish women potential is poor security provided by law enforcement agencies. Women in the country cannot move freely due to lack of safety.
Their mobility becomes limited and they cannot knock at the doors of economic empowerment like their male counterparts.
Selima, who won the Oslo Business for Peace Award 2014, said besides capital women entrepreneurs must have a well thought-out business plan, market information and knowledge about the demand for her product.
Accounting is another factor that the woman entrepreneur needs to know. They should know the characteristic of the customers. If anybody can do that, she will be a successful business person.
The women business leader alleged that women entrepreneurs do not get a gender-friendly environment.
Leading businesswoman Selima suggested that when the country signs bilateral or multilateral agreements, it should consider how many women would benefit from this. It is very important to think about the gender economic policy when the country signs trade agreements with other countries.
Whenever policy makers make any policy, they have to think whether women would benefit or not, she added.
Marketing is the main challenge for an entrepreneur. She has to monitor the competitiveness of her product. She should know the characteristics of her customers, said Selima.
There is no actual research on how many women are there in the business sector in Bangladesh. It is likely to be ten or twelve per cent. But the national economy needs women’s contribution to become a middle-income country.
The nation must take action to remove the obstacles that restrict women from realising their full potential.
A business culture should be created that embraces a flexible working environment for them, said the women leaders.