SME loan not adequate for 56pc women entrepreneurs: BIDS study

Staff Correspondent | Published: 00:00, Nov 12,2018

 
 

Majority of the female small and medium entrepreneurs have reported that the current loan limit for the SME sectors is inadequate considering the financial need for growing their business, a study conducted by Bangladesh Institute of Development Studies has found.
The study findings were disclosed at BIDS Research Almanac, 2018 held at Lakeshore Hotel in Dhaka.
A three-member BIDS team comprising its senior research fellows Nazneen Ahmed and Monzur Hossain and research associate Iqbal Hossain conducted the study titled ‘Women Entrepreneurs in SMEs: Bangladesh Perspective’.
Iqbal Hossain presented the research papers at the technical session on ‘SME productivity, financing and women entrepreneurs’ where he mentioned that 1,510 women-headed enterprises were surveyed under the research.
According to the finding, 58 per cent of the entrepreneurs have applied for SME loans and 92 per cent of them received the loans.
On average 56.17 per cent female entrepreneurs found the current SME loan amount inadequate for them to expand their business, Iqbal said.
Besides, about 39 per cent of female entrepreneurs complained about high interest rates.
The women entrepreneurs still faced several constraints in accessing finance, the BIDS research associate said.
The constraints includes arranging guarantors, asking for guarantors’ documents, mortgage documents, high interest rate and demand for transaction in a bank ac count, lack of proper information regarding the rules of loans in different banks, higher service charge, lack in proper knowledge regarding the banking system, lack of business plan, difficulty for widows and divorced women and non-cooperation and harassment in banks.
Some commercial banks asked for collateral from women entrepreneurs even for loan worth below Tk 25 lakhin in violation of Bangladesh Bank’s rules, Iqbal said.
The study, however, showed that 92 per cent of the women entrepreneurs who applied for loans got SME loan facility for banks.
The research paper suggested that the women entrepreneurs should get adequate amount of credit facilities along with three-month grace period.
It also shows that development of women entrepreneurship will create job opportunities for more females as 85 per cent of employees employed by women entrepreneurs are women.
At the inaugural session of the programme, BIDS director general KAS Murshid said that creating employment was important in line with the economic growth. Otherwise, it would not be possible to cater demographic dividend.
On the first day of the two-day programme, 10 papers were presented on agriculture, employment, SME, importance of human development.
Another seven research papers on urbanisation, disaster vulnerability, social safety nets, energy use, migration and household welfare would be presented today, the closing day.

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