Staff Reporter :
High lending rate to the Small and Medium Enterprises (SMEs) for women entrepreneurs are hindering their business as they are not getting expected level of profit after paying their equal monthly installment, said experts and women entrepreneurs.
Women entrepreneurs feel that the interest rate on their loans is still high although the Bangladesh Bank has instructed financial institutions to provide SME loan with low interest for the women entrepreneurs.
Most of the fund for women entrepreneurs are driven from the development partners, such as, Japan International Cooperation Agency (JICA) and World Bank with low interest rate. The central bank disburses such amount through various financial institutions.
Talking to New Nation, Centre for Policy Dialogue (CPD) Research Director Dr Fahmida Khatun revealed some major challenges for the women entrepreneurs to avail adequate SME loan to run their business.
CPD survey pointed out that 23 per cent of the country’s total commercial loan, disbursed by the financial institutions, in last year went to the SME sector.
Of the total SME loan portfolio, only 3.2 per cent loan was disbursed among the women entrepreneurs, said Dr Fahmida Khatun who conducted the survey with a view to identify the challenges the women entrepreneurs are facing to run their business.
She conducted the survey among 129 women entrepreneurs from Dhaka, Savar, Gazipur and Narayanganj. Despite several national policies and institutional measures, access to credit by women entrepreneurs in Bangladesh is not satisfactory, she claimed.
Dr. Fahmida said the highest of 71.54 per cent loans 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.
She said 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 from IFIC Bank and 10 per cent from other financial institutions, said Dr. Fahmida.
About 69 per cent of the entrepreneurs said they are facing problems in getting loan and 45 per cent said bank officials were not cooperating, according to the survey.
She said about 37.5 per cent of the entrepreneurs claomed that collateral or mortgage is a problem to get the loan.
The CPD research director said high lending rate is hampering the business of women entrepreneurs. “It should be reduced for the betterment of the country’s economic development.”
She said some 73.08 per cent entrepreneurs think that the financial institutions take too long time for processing the loan request. “Lack of knowledge and gathering information is another obstacle to credit access for women entrepreneurs.”
Talking to The New Nation, former president of Bangladesh Women Chamber of Commerce and Industry (BWCCI) Selima Ahmed said that the country’s women entrepreneurs are facing multifarious difficulties to avail the SME loan.
Although most of the banks have their women dedicated desks with a view to promoting women entrepreneurs, those are not performing accordingly, she claimed.
“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 the ex-BWCCI president urging all to help women entrepreneurs to promote their business which ultimately help attain a vibrant national economy.
Annual Development Fund (ADP) allocation related to women’s development should be disbursed earlier rather than the last quarter to ensure their effective utilization, said Selima Ahmed. She demanded a specific allocation in the budget for the development of women entrepreneurs across the country.
Bangladesh Institute of Bank Management (BIBM) SME Consultant Sukumol Sinha Chowdhury underscored the need for a specific guideline 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 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.
The financial assistance under SMEs by banks and non-banks institutions to the women entrepreneurs has already been reduced economic disparity from the society, said Bangladesh Bank Executive Director M Mahfuzur Rahman.
Country’s financial institutions lent about Tk 4,000 crore to 43,000 among women entrepreneurs last year, which was 18 per cent higher than the previous year’s disbursement, he said.
This amount revealed that the number of women entrepreneurs is significantly increasing, said the BB executive director.
“Of course, we have to facilitate women entrepreneurs for expanding their business with a view to reducing economic disparity from society as well as attaining sustainable economic development,” said Mahfuzur Rahman.
He mentioned that the SME loan was targeted Tk 100,000 crore for the current calendar year. Of this, 80,000 female entrepreneurs received Tk 900 crore. In the last five years, loans amounting to Tk 14,000 crore were disbursed among 212,000 women entrepreneurs, said the central bank official.
He said the central bank has consistently been supporting measures so that female entrepreneurs can come forward for business.
“Already 15 per cent of the loans under re-financing scheme have been kept for female entrepreneurship and separate women’s desks have been set up in each of the banks to help and promote female entrepreneurship,” he said.
He said, half of the country’s population is women. So, the country would not achieve sustainable development until this segment of the society is not involved in mainstream economy.
Md. Saiful Islam, Manager of Pubali Bank (Islamic Banking Branch) said commercial banks receive refinance fund from the central bank at the rate of six to seven per cent. Cost of expenditure of financial institutions is one of the major reasons for high lending rate for women entrepreneurs.
He, however, underscored the need for strong monitoring of the central bank regarding the actual scenario of SME loan favouring women entrepreneurs.
High lending rate to the Small and Medium Enterprises (SMEs) for women entrepreneurs are hindering their business as they are not getting expected level of profit after paying their equal monthly installment, said experts and women entrepreneurs.
Women entrepreneurs feel that the interest rate on their loans is still high although the Bangladesh Bank has instructed financial institutions to provide SME loan with low interest for the women entrepreneurs.
Most of the fund for women entrepreneurs are driven from the development partners, such as, Japan International Cooperation Agency (JICA) and World Bank with low interest rate. The central bank disburses such amount through various financial institutions.
Talking to New Nation, Centre for Policy Dialogue (CPD) Research Director Dr Fahmida Khatun revealed some major challenges for the women entrepreneurs to avail adequate SME loan to run their business.
CPD survey pointed out that 23 per cent of the country’s total commercial loan, disbursed by the financial institutions, in last year went to the SME sector.
Of the total SME loan portfolio, only 3.2 per cent loan was disbursed among the women entrepreneurs, said Dr Fahmida Khatun who conducted the survey with a view to identify the challenges the women entrepreneurs are facing to run their business.
She conducted the survey among 129 women entrepreneurs from Dhaka, Savar, Gazipur and Narayanganj. Despite several national policies and institutional measures, access to credit by women entrepreneurs in Bangladesh is not satisfactory, she claimed.
Dr. Fahmida said the highest of 71.54 per cent loans 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.
She said 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 from IFIC Bank and 10 per cent from other financial institutions, said Dr. Fahmida.
About 69 per cent of the entrepreneurs said they are facing problems in getting loan and 45 per cent said bank officials were not cooperating, according to the survey.
She said about 37.5 per cent of the entrepreneurs claomed that collateral or mortgage is a problem to get the loan.
The CPD research director said high lending rate is hampering the business of women entrepreneurs. “It should be reduced for the betterment of the country’s economic development.”
She said some 73.08 per cent entrepreneurs think that the financial institutions take too long time for processing the loan request. “Lack of knowledge and gathering information is another obstacle to credit access for women entrepreneurs.”
Talking to The New Nation, former president of Bangladesh Women Chamber of Commerce and Industry (BWCCI) Selima Ahmed said that the country’s women entrepreneurs are facing multifarious difficulties to avail the SME loan.
Although most of the banks have their women dedicated desks with a view to promoting women entrepreneurs, those are not performing accordingly, she claimed.
“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 the ex-BWCCI president urging all to help women entrepreneurs to promote their business which ultimately help attain a vibrant national economy.
Annual Development Fund (ADP) allocation related to women’s development should be disbursed earlier rather than the last quarter to ensure their effective utilization, said Selima Ahmed. She demanded a specific allocation in the budget for the development of women entrepreneurs across the country.
Bangladesh Institute of Bank Management (BIBM) SME Consultant Sukumol Sinha Chowdhury underscored the need for a specific guideline 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 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.
The financial assistance under SMEs by banks and non-banks institutions to the women entrepreneurs has already been reduced economic disparity from the society, said Bangladesh Bank Executive Director M Mahfuzur Rahman.
Country’s financial institutions lent about Tk 4,000 crore to 43,000 among women entrepreneurs last year, which was 18 per cent higher than the previous year’s disbursement, he said.
This amount revealed that the number of women entrepreneurs is significantly increasing, said the BB executive director.
“Of course, we have to facilitate women entrepreneurs for expanding their business with a view to reducing economic disparity from society as well as attaining sustainable economic development,” said Mahfuzur Rahman.
He mentioned that the SME loan was targeted Tk 100,000 crore for the current calendar year. Of this, 80,000 female entrepreneurs received Tk 900 crore. In the last five years, loans amounting to Tk 14,000 crore were disbursed among 212,000 women entrepreneurs, said the central bank official.
He said the central bank has consistently been supporting measures so that female entrepreneurs can come forward for business.
“Already 15 per cent of the loans under re-financing scheme have been kept for female entrepreneurship and separate women’s desks have been set up in each of the banks to help and promote female entrepreneurship,” he said.
He said, half of the country’s population is women. So, the country would not achieve sustainable development until this segment of the society is not involved in mainstream economy.
Md. Saiful Islam, Manager of Pubali Bank (Islamic Banking Branch) said commercial banks receive refinance fund from the central bank at the rate of six to seven per cent. Cost of expenditure of financial institutions is one of the major reasons for high lending rate for women entrepreneurs.
He, however, underscored the need for strong monitoring of the central bank regarding the actual scenario of SME loan favouring women entrepreneurs.
