Only 3.5 pc SME loan goes for women entrepreneurs
Considering the necessity of attaining a sustainable economy as well as reducing economic disparity, the government is committed to ensure access to finance for women entrepreneurs under SME loan but commercial banks are failing to achieve their disbursement target through violating the instruction of the central bank.
According to Bangladesh Bank (BB) guideline, banks are bound to disburse 10 percent loan for women entrepreneurs under SME category. The total SME loan in the banking sector stood at Tk 744,102 crore as of September last year but the women borrowers got only 3.5 percent of the loans.
At present, 20 percent of all bank loans are supposed to go to SMEs and the BB will raise it to 25 percent by 2025. Of the 25 percent SME loan, a minimum 10 percent will have to go to women entrepreneurs, Bangladesh bank governor Fazle Kabir said recently.
“There is an allegation that women entrepreneurs don’t get support from banks due to a lack of confidence,” the governor added.
The Founder President of Bangladesh Women Chamber of Commerce and Industry (BWCCI) Selima Ahmed has underscored the need for strengthening access to finance for women entrepreneurs with a view to attaining sustainable economy and reducing economic disparity from the society.
When talking with Daily Industry the BWCCI president said, “If we ensure more credit access for women entrepreneurs across the country, it would help empowering themselves in the society as well as boosting the economy”.
Currently, the private commercial banks (PCBs) and state-owned commercial banks (SOCBs) are allocating SME loan to the women entrepreneurs according to the instruction of the central bank but it’s not sufficient against the demand of the entrepreneurs, Selima Ahmed lamented.
On the other hand foreign commercial banks (FCBs) and non-banking financial institutions (NBFIs) did not comply with the central bank’s instructions for disbursing their yearly targeted amount, she claimed. As the PCBs and non-banking financial institutions (NBFIs) have not sufficient branch in the rural areas, they can make a liaison with the micro-credit financial institutions (MFIs) to disburse their SME loan in favour of the women entrepreneurs across the country, she suggested.
She urged the central bank to monitor the matter strictly so that the FCBs and NBFIs can fulfill their yearly disbursement target.
The BWCCI leader claimed that country’s women entrepreneurs are facing multifarious difficulties to avail the SME loan from the financial institutions. Most of the banks have women dedicated desk to promote women entrepreneurs, but the desks are not performing accordingly.
“Of course there are some lapses among the women entrepreneurs to avail the loan mainly due to lack of knowledge about the banking procedure”, said the BWCCI president urging all to help women entrepreneurs to promote their business which ultimately help to attain a vibrant economy.
CPD Research Director Fahmida Khatun said that about 23 percent of the country’s total commercial loan, disbursed by the financial institutions, only 3.2 percent loan was disbursed among the women entrepreneurs.
She conducted a research for identifying the challenges the women entrepreneurs are facing. The survey carried out among 129 women entrepreneurs from Dhaka, Savar, Gazipur and Narayanganj, suggested for enhancing women access to a developed SME infrastructure and setting up help desks at banks to reduce the problems faced by the women entrepreneurs.
Despite several national policies and institutional measures, access to credit by women entrepreneurs in Bangladesh is not satisfactory. According to the survey, the highest amount of 71.54 percent, loans were received by women entrepreneurs from Dhaka followed by 18.46 percent from Gazipur, 6.92 percent from Narayanganj and 3.08 percent in Savar.
The CPD director said that 54 percent women entrepreneurs are involved in trading, 28 percent in manufacturing sector and 18 percent in service industry. Approximately, 17 percent of the surveyed entrepreneurs were found not to keep any financial statement of their business.
About 54 percent of the women entrepreneurs took loan from the BRAC Bank, about 8.46 percent received loan from the IFIC Bank and 10 percent of the entrepreneurs received loan from other financial institutions, said the report.
The research also disclosed that 69 percent of the entrepreneurs reported that they are facing problems in getting loan and 45 percent entrepreneurs said that bank people were not cooperating. About 37.5 percent said that collateral or mortgage is a problem for getting loan.
Majority of the respondents feel that the interest rate on their loans is too high which is hampering their business and should be reduced. About 73.08 percent women entrepreneurs think that the banks take too long time for processing the loan request.
Lack of knowledge and gathering information is another obstacle to credit access for women entrepreneurs which also consume an unusual span of time. It is also difficult for entrepreneurs belonging to lower middle class group to provide collaterals for sanctioning loans, also mentioned the CPD report.
Talking to this correspondent, former Bangladesh Institute of Bank Management (BIBM) SME consultant, Sukumol Sinha Chowdhury also underscored the need for a specific guidelines for the financial institutions to disburse the loan among the women entrepreneurs.
Banks have undertaken several initiatives to encourage county’s women entrepreneurs to avail the loan since the inception of central bank’s SME department, said the SME consultant.
He urged the government, central bank, financial institutions and SME foundation to take more proactive initiatives to promote country’s women entrepreneurs for boosting economy.
Source: http://www.dailyindustry.news