Samiha Binte Tariq

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“Dreams are what we are made of and my dream is to make my factory bigger” says forty year old Parveen Akhter, once a victim of kidnap and domestic abuse, now the successful Founder and Managing Director of her own business, Glamour Boutique House and Training Centre in Jessore, Bangladesh (UN Women, 2019). Relentlessly fighting against poverty, social stigma, inequality and gender discrimination for twelve years, Parveen has now solely employed 52 women in her 4000 square-feet factory and plans to expand her business even more. Despite the growing positive impact of Women Entrepreneurship in the country, the concept is still underrated in realizing how great of a means it can be in order to elevate economic development and prosperity in Bangladesh.

The scope of women entrepreneurship is still limited in Bangladesh due to several constraints and discrimination prevalent in the society. According to a research conducted by the International Finance Corporation (IFC) under World Bank Group, only 7.2% of the businesses in Bangladesh are run by women and very few of them are involved in wholesale and retail trade business at a commercial level (UNCDF, n.d.). Lack of support from family and community and pre-conceived stigma regarding women’s capabilities make them reluctant to initiate their start-up businesses (UNCDF, n.d.). Moreover, many women give up on their dreams of starting a new business due to the fear of sexual harassment at workplace and at public transit. Consequently, women are always depicted as secondary decision makers in relation to their male counterparts.

Furthermore, lack of finance is one of the most fundamental reasons for women’s paucity of enthusiasm to start their entrepreneurial career. Among the sum of BDT 56,116 crore lent to small firms, banks and financial institutions lent only BDT 2,079 crore to women enterprises which was only 3.71% of small loans in 2016 (Star Business Report, 2019). According to an IFC study in 2014, only 1% of the entire lending portfolio for Small and Medium Enterprises (SME) was allocated to the women owned enterprises in Bangladesh and 48% of women entrepreneurs face bigger hurdles in acquiring loans to finance their businesses with respect to men (UNCDF). 26% of the deposits in banks and financial institutions are owned by women but only 2% credit of the total outstanding loans are distributed to women borrowers which depicts a huge gender gap in financial inclusion (Star Business Report, 2017) and this is a discouraging factor for women entrepreneurs. In addition, overcoming bureaucracy, completing lengthy documentation processes to get loans and hiring employees are further challenges faced by women in their business career (Akter, Mahmud and Banik, 2017). According to the IFC study, around 80% of the female entrepreneurs are discontented with the lengthy documentation process consisting of 13 visits to banks, repeated delays and 137 days to receive loans (UNCDF, n.d.). As 80% of the women merchants have been devoid of safe transport and means of communication (IFC study), lengthy documentation process and repeated visits to banks make women more reluctant to start or continue their businesses.

Despite facing constraints in availing opportunities compared to that of their male counterparts (ADB, 2013), women are breaking barriers and inspiring other women to embrace their entrepreneurial and leadership skills. However, their determination is not enough to get them far due to underlying weaknesses in the factors that affect women entrepreneurship. Using data from Elite Quality Index Report 2021 published by the Foundation of Value Creation (FVC) –a Swiss entity that provides the global measures of contribution of elites in development - a recent study conducted by Research and Professional Development Center (RPDC) under BRAC Business School found that empowerment of women, laws and regulations regarding women business and the availability of venture capital have significant impact on women entrepreneurship.

Data Source: Elite Quality Index Report (2021)

It is evident that women empowerment mitigates household poverty significantly and contributes to economic growth (Adewusi, 2011). Women power index, which determines the status of women’s involvement in political parties, undertakes the score of 54.3 for Bangladesh in 2021 which is significantly lower than that of other countries like India and Uganda which have scores of 62 and 76.3 respectively. However, in this regard, Bangladesh surpasses China by double the score. On the other hand, in terms of the index of women business law, an indicator that explains the effect of laws on women’s involvement in business, Bangladesh has the lowest score of only 13.8 compared to other countries such as- China, India Uganda and Turkey.

Data Source: Elite Quality Index Report (2021)

Venture capital helps women around the world access the available private equity to finance their start-up businesses and is essential to encourage women living in peripheral countries to grab the opportunity in starting their own businesses. Unfortunately, Bangladesh has the lowest share of venture capital availability with a score of only 33.5 among the other countries shown in the graph. Due to the less availability of VCA and patriarchal norms entrenched in the stereotypical society of Bangladesh, women’s contributions are confined within the household chores and they face difficulties in acquiring these equity funds (Ferdousi and Mahmud, 2019).

On top of that, in the MasterCard Index of Women Entrepreneurs (2020), an indicator which analyzes the progress of women entrepreneurship on a global scale, Bangladesh was ranked one of the lowest among the 58 economies that were scrutinized (Star Business Report, 2020). This essentially depicts that the socioeconomic factors propelling women’s triumph in business have yet to be strengthened in Bangladesh. 

In light of increasing the potential income of female borrowers and supporting the financial credentials of rural households, the microcredit program was introduced. Microcredit program was primarily designed to empower the marginalized communities socially and economically.

Due to high transaction costs, collateral requirements and lengthy documentation process, conventional banking systems in the developing countries have not yet been successful in providing financial services to the marginalized people in the rural area (Coleman, 2006; Mallick, 2012). While the traditional financial system has failed to alleviate poverty, microcredit programs play a pivotal role in generating higher income for the rural poor, especially women (Ferdousi, 2015). For a long time, microcredit programs have provided financial support to women as entrepreneurs as well as contributed to their decision making abilities and fostered economic empowerment for women (Ferdousi and Mahmud, 2019). Nowadays, social businesses help women, especially in the rural area, receive equity funds in order to finance their entrepreneurial career (Ferdousi and Mahmud, 2019).

Undoubtedly, women entrepreneurship is a principal factor in fostering economic growth and creating new employment opportunities. MIDAS (2009) found that women entrepreneurship has positively affected the economic development of Bangladesh. Through micro ventures and reinvestment of retained earnings, many women have been able to become self-sufficient and sole earners of their households. For instance, Nabila Jebin Upama, a 30 year old mom, a proud entrepreneur of her online business, “Mom’s Day-Night” and also an alumni of Women Entrepreneurship training program, Venture Maestras under RPDC of BRAC Business School, has been successful in supporting her family when her husband became unemployed during the COVID-19 pandemic. Selling freshly homemade baby-food has been her passion and she plans to expand her business at a broader scale. However, Nabila says, “I am struggling to this day to get my product tested and certified by professionals due to gender discrimination but I will never give up and one day I will be able to establish my business at a commercial level.”

In conclusion, women like Parveen and Nabila are evidence of the fact that many ambitious women exist in Bangladesh to dismantle the barriers of economic inequality and create income opportunities for themselves as well as for others. However, finding them and proving their potential is quite a challenge: “We want to invest in projects, but women too need to prove that their projects are worth the investment” urges Shazia Afrin, Business Development Officer at IPDC Finance LTD (UN Women, 2019). Therefore, it is the duty of the govt., NGOs, activists and other stakeholders to establish networks between aspiring women entrepreneurs and interested investors and venture capitalists in order to help these businesses thrive. Moreover, women’s financial literacy and financial access should be strengthened by the govt. by creating specialized training programs for women. In this regard, RPDC’s pilot project, women entrepreneurship program has been successful in bringing many aspiring women entrepreneurs together in order to receive professional training in conducting their businesses. Programs like this should be promoted and funded by corporations as their social responsibilities. Furthermore, banks and other financial institutions should streamline their services and financial products for women who are eager to start businesses and make the lengthy documentation process easier for them. Safe transports and communication system should be implemented to encourage more women to start their entrepreneurial career. Therefore, the power of women entrepreneurship should not be underestimated. Instead, we, as a nation, should recognize its evident capabilities in mitigating poverty and creating employment in the economy and promote it for the welfare of Bangladesh’s growth and prosperity.



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