Brac provides access to financing for women entrepreneurs

Brac provided 1,040 pandemic-affected female entrepreneurs with in-depth business development training.

Lessons and recommendations from this project were shared at an event titled “National Policy Dialogue: Access to Finance for Women Entrepreneurs” held on Thursday 26 May at the Brac Center in the capital.

According to a press release, Md Jaker Hossain, Managing Director, Bangladesh Bank, Md Mahbubor Rahman, Chairman, Bangladesh Small and Cottage Industries Corporation (BSCIC), Dr Md Mafizur Rahman, Managing Director, SME Foundation, and Mirza Nurul Ghani Shovon, Chairman , National Association of Small Craft Industries of Bangladesh (NASCIB), were present at the policy dialogue as special guests.

Safi Rahman Khan, Director, Education, Skills Development and Migration, Brac, delivered the welcome speech, while Nobonita Chowdhury, Director, Gender Justice and Diversity, set the background and purpose of the event.

KAM Morshed, Senior Director, Brac, presented the way forward and delivered closing remarks. Two presentations, one on the pilot project implemented by Brac focusing on economic recovery and business improvement for 1,040 women business owners and the other on a policy document, were also presented in the program.

Bangladesh Bank Managing Director, Md Jaker Hossain said, “Women entrepreneurs who do not have up-to-date information on many facilities they can access are a big disadvantage here. Few female SME entrepreneurs know that Bangladesh Bank has a directive to waive 1% interest for regular loan repayment.

BSCIC Chairman, Md Mahbubor Rahman said, “BSCIC has six divisions, one of which is the marketing division which works tirelessly to increase opportunities for SME entrepreneurs. Part of her work is to expand the opportunities of electronic platforms for women entrepreneurs.

SME Foundation MD Dr Md Mafizur Rahman said, “The SME Foundation has received a tiny portion of the government stimulus package to overcome the loss of the pandemic. Within a concise timeframe, we have disbursed all loans and have a comprehensive database of those who have received them. But banks still couldn’t fully disburse the package.

NASCIB President Mirza Nurul Ghani Shovon said, “Women entrepreneurs have been devastated by the pandemic. They could not benefit from the government’s 20,000 crore taka stimulus package. The authority should investigate why this happened and bring responsible officials to reserve their failure.

Brac Director, Safi Rahman Khan said, “Besides improving business literacy, female entrepreneurs also face challenges in terms of acquiring the main and necessary capital for their business. We would like to express our sincere gratitude to the Visa Foundation, our development partner, and the team involved in the implementation of the project”

Brac Director Nobonita Chowdhury said, “80% of female entrepreneurs cannot access loans without a male guarantor despite the absence of such a binding policy. We need flexibility in lending policies for women entrepreneurs in Bangladesh”

Brac’s Senior Director, KAM Morshed, said in his closing speech, “We have clearly understood the problem of information asymmetry and awareness. This is a complex issue that needs to be addressed carefully. We need the cooperation of banks, financial institutions and policy makers.

The national policy dialogue was organized as part of Brac’s implementation of a pilot project (June 2021 – May 2022) funded by the Visa Foundation. The pilot project focused on the economic recovery of women-led businesses that suffered heavy losses during the pandemic. Based on profile mapping and Brac’s extensive experience in market development, an advanced skills training program with training in sustainable business development was organized for 1,040 female entrepreneurs.

According to the Bangladesh Bureau of Statistics, female participation in the labor force in Bangladesh has increased from 24% in 2000 to 36% in 2020. The SME sector, in which women are heavily involved both as owners companies and workers, contributes 25% of the country’s GDP. Covid-19 is having a devastating impact on female-owned CMSMEs, as 41% of owners have completely closed their businesses, according to an October 2020 survey by the Center for Policy Dialogue among female-owned CMSMEs in through Bangladesh.

Highlights of the recommendations made as part of this project are as follows.

  • Set a lower cap on final interest rates at a maximum of 7% for female entrepreneurs
  • Establish eligibility criteria for female CMSME entrepreneurs in a pragmatic manner based on their socio-economic condition and the nature of their businesses.
  • Reform the lending and financing policies of banks and MFIs to enable women entrepreneurs to access their support
  • Grant/increase grace periods for loan repayment
  • Address challenges in accessing stimulus packages and government grants
  • Build the capacity of women-led CMMEs on e-commerce platforms
  • Increase/facilitate insurance opportunities for women-led CMSMEs to insure losses induced by natural/man-made disasters.
  • Build strong mechanisms for women entrepreneurs to acquire appropriate skills and capacity building training
  • Introduce a common curriculum-based training certification entity for women entrepreneurs in the CMSME sector
  • Bring disadvantaged women-led CMSMEs under the umbrella of the social safety net.