Brac provides access to finance for women entrepreneurs

Brac provided 1040 pandemic-hit women entrepreneurs received extensive business development training.

The learnings and recommendations from this project were shared at an event titled “National policy dialogue: Access to finance for women entrepreneurs” organized on Thursday (May 26) at the Brac Center in the capital.

According to a press release, Md Jaker Hossain, general manager, 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, president , National Association of Small and Cottage Industries of Bangladesh (NASCIB), were present at the policy dialogue as special guests.

Safi Rahman Khan, director, Education, Skills Development and Migration, Brac, made the welcome remarks, while Nobonita Chowdhury, director, Gender Justice, and Diversity, set the context and objective of the event.

KAM Morshed, senior director, Brac, presented the way forward and made the closing remarks. Two presentations, one on the pilot project Brac implemented focusing on economic recovery and business improvement of 1,040 women enterprise owners and another on a policy brief, were also presented at the program.

Bangladesh Bank GM Md Jaker Hossain said: “Women entrepreneurs not having updated information about many of the facilities they can access is a big drawback here. Not many women SME entrepreneurs know that Bangladesh Bank has a directive to waiver 1% of the interest for regular repayment of loans. ”

BSCIC chairman Md Mahbubor Rahman said: “BSCIC has six divisions one of which is the marketing division that is relentlessly working to increase the opportunities for SME entrepreneurs. Part of its work is on broadening the opportunities of e-platforms for women entrepreneurs. ”

SME Foundation MD Dr Md Mafizur Rahman said: “The SME Foundation received a tiny part of the government’s stimulus package to overcome the loss of pandemic. Within a concise time, we have disbursed all the loans and we have a full database of those who received them. But the banks could not yet disburse the package fully. ”

NASCIB president Mirza Nurul Ghani Shovon said: “Women entrepreneurs have been devastated by the pandemic. They could not benefit from the 20 thousand crore taka worth of stimulus package from the government. The authority should investigate why that happened and bring the officials responsible to book for their failure. ”

Brac director Safi Rahman Khan said: “Apart from increasing business knowledge, women entrepreneurs also face challenges in terms of acquiring primary 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 women entrepreneurs cannot access loans without a male guarantor despite there’s no such policy binding. We need flexibility in loan availing policies for women entrepreneurs in Bangladesh ”

Brac senior director KAM Morshed said in his closing remarks: “We have clearly understood the issue of asymmetry of information and awareness. This is a complex issue and must be resolved with care. We need the cooperation of banks, financial institutions and policymakers. ”

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

According to the Bangladesh Bureau of Statistics, women’s participation in Bangladesh’s labor force has increased from 24% in 2000 to 36% in 2020. The SME sector, in which women are heavily involved both as business owners and workers, contributes to 25% of the the country’s GDP. Covid-19 has a devastating impact on women-led CMSMEs, to the extent that 41% of owners closed down businesses altogether, according to a survey conducted in October 2020 by the Center for Policy Dialogue among female-owned CMSMEs across Bangladesh.

Highlights of the recommendations drawn under this project are as follows.

  • Set a lower ceiling in final interest rates at a maximum of 7% for women entrepreneurs
  • Set eligibility criteria for CMSME women entrepreneurs pragmatically based on their socio-economic condition and the nature of their businesses.
  • Reform loan and finance policies of banks and MFIs to enable women business owners to access their support
  • Give / increase grace periods for loan repayment
  • Address the challenges of accessing the government stimulus packages and grants
  • Capacity women-led CMSMEs on e-commerce platforms
  • Increase / facilitate insurance opportunities for the women-led CMSMEs so that they can insure losses induced by natural / manmade 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 CMSMEs led by disadvantaged women under the social safety net umbrella.

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