Abstract
This article examines the challenges and obstacles faced by female entrepreneurs in the cottage, micro, small, and medium enterprise (CMSME) sector in Bangladesh and shows that a combination of legislatory and regulatory reform can mitigate many of the issues that prevent women gaining from, and contributing to, this vital economic sector. Access to finance is found to be the greatest challenge faced by women in starting and operating CMSMEs in Bangladesh. This article explores the significant gender gap in access to formal credit, a gap that impacts negatively on the sector’s growth and development. The article uses liberal feminist theory as a framework for analysis of the reforms. Analysis of data collected from banks and financial institutions on CMSME loans (2010–2018) shows that female entrepreneurs are treated significantly differently from men by financial institutions in Bangladesh.
1.INTRODUCTION
The intention of this study is to examine the challenges and obstacles faced by female entrepreneurs in the cottage, micro, small, and medium enterprise (CMSME) sector in terms of a supply-side finance gap that obstructs the growth and development of this vital economic sector in Bangladesh. Using feminist theoretical ideas and a liberal viewpoint, the article explores how gender-biased and structural barriers prevent female entrepreneurs from financing their CMSME activities. The study analyses data collected from banks and financial institutions (FIs) 1 on CMSME loans for the period 2010–2018. The findings show that female entrepreneurs are treated significantly differently from men by FIs in Bangladesh, and the situation is not improving.
In Bangladesh, half of the population is female. 2 During recent decades, women’s contributions to the country’s economic and social development have increased substantially (Ahmed, 2014). Nonetheless, participation by women in the formal economy is still inadequate (Chowdhury, 2006). Even today, the progress of women as entrepreneurs in Bangladesh is remarkably poor. Compared with men, few women participate in the CMSME sector.
In recent years, the Government of Bangladesh, Bangladesh Bank (BB), the Central Bank of Bangladesh, and the Asian Development Bank have increased financial support of female-owned CMSMEs in both rural and urban Bangladesh. Nevertheless, women are excluded from accessing working capital that would let them participate in financial markets or develop and run a business. For example, during 2010–2018, banks and FIs in Bangladesh disbursed loans of Bangladesh Taka (BDT) 9,423,186 million to CMSME entrepreneurs, of which male entrepreneurs obtained BDT9,090,878 million (96.5%) and female entrepreneurs only BDT332,306 million (3.5%; Appendix A). These figures vividly demonstrate women’s poor access to finance compared with their male counterparts.
Research shows that economic developments lead to cultural developments that lead to societal change that transforms the position of women into one of equality rather than subordination (Inglehart, Norris, & Welzel, 2004). Women’s representation in the mainstream economy is crucial because female entrepreneurship leads women to greater economic independence and gender equality in decision making (Goyal & Yadav, 2014). Evidence shows that the economic empowerment of women results in significant improvements in children’s health, nutrition, and education and has multiplier effects on sustainable development (International Finance Corporation [IFC], 2011).
Women’s self-employment increases their income, which strengthens their bargaining capacity and control over resources. This allows them to make greater investments in their own quality of life and in their children’s well-being. The World Bank’s World Development Report 2011 suggests that to increase the level of productivity by 25%, several countries should eliminate unfair practices towards women. In Uganda, policy restraints obstruct women’s full economic participation and cause a reduction in the gross domestic product by 2%.
Today, female entrepreneurs represent almost 40% of all private firms in the United States and 34% and 33% of the total businesses in Austria and in France, respectively (Cutura, 2010). On the other hand, female-owned firms constituted only 3% to 4% of total business enterprises in Bangladesh (Ahmed, 2014). In 2013, the Bangladesh Bureau of Statistics estimated that micro, small, and medium enterprises made up 99.9% of all businesses in Bangladesh but that women owned only 7.2% of them (Eusuf, Shahan, Khaleque, & Rana, 2017). The World Bank’s Enterprise Surveys Report in 2013 notes that female-owned firms in Bangladesh contribute only 13.7% in the manufacturing sector, which is a substantially lower percentage than found in other nations of the South Asian region.
A study by Chowdhury, Mintoo, Chowdhury, and Ahmed (2010) suggested that in Bangladesh, female-entrepreneurship firms have contributed more to adding gross value (as a percentage of the gross value of output per firm) and generated higher net cash gains than male-entrepreneurship firms. Coleman’s (2007) findings show that female-run firms make more profit in sales than male-run firms. However, the data from the Bangladesh Bureau of Statistics in 2001–2003 estimated that there is a substantial gender gap regarding the CMSME ownership between men (92.6%) and women (7.4%; Chowdhury et al., 2010).
Female entrepreneurs in the CMSME sector of Bangladesh have a growing need for credit. Despite this, there are formalities and complicated procedures that often make credit almost unattainable. These include poor implementation of existing policies, lack of institutional support, discriminatory laws, and the lack of a woman-friendly sociocultural and economic environment. Access to finance is the greatest challenge faced by female entrepreneurs in starting and operating CMSMEs in Bangladesh. A study by Eusuf et al. (2017) on Bangladesh found that 58% of surveyed women reported they lacked capital to start their business, and 29% said this might limit the success of their business.
This study explores the literature on female entrepreneurs and theoretical constructions that focus on liberal feminism to address the challenges faced by female entrepreneurs in CMSME financing in Bangladesh. It discusses policies for the development of women’s entrepreneurship in Bangladesh and looks at recent data about loan distribution (2010–2018) to examine whether there is any gender-based difference in CMSME lending to male and female entrepreneurs. Section 8 deals with social issues and the inadequacy of institutional measures, both of which have limited women’s ability to access finance for CMSME businesses. Section 16 suggests necessary policy and regulatory support for enhancing institutional financing facilities to ensure the sustainability of female entrepreneurs in the CMSME sector. Such measures could turn the sector into an engine of growth in Bangladesh.
2 LITERATURE REVIEW
Research suggests that gender bias often has negative effects on access to finance, especially in developing countries and among women (Muravyev, Schafer, & Talavera, 2009). Several studies have looked at female entrepreneurs in the western world. Watson, Newby, and Mahuka (2009), in a study from Australia, found no evidence of gender differences in the use of bank loans and venture capital. The authors claimed that female entrepreneurs in Western Australia were not being affected by a supply-side finance gap while developing and running businesses. However, their sample was chosen from a selection of Western Australian businesses that excluded large segments of the small and medium enterprise (SME) population.
A different view was proposed by Carter (2000), Marlow and Patton (2005), and Harrison and Mason (2007). They argued that even when men and women had similar education, socio-economic background, and motivation to participate in the labour market, a majority of female-run firms were denied loans because of gender biases, and this hindered their growth. Carter (2000) also found women participants were often dissatisfied with start-up programs, which they found ignored their development.
Some studies, for example, those of Manolova, Brush, and Edelman (2008) and Brush, De Bruin, and Welter (2014), showed that female entrepreneurs were more often motivated by noneconomic goals such as a desire for challenge, independence, self-confidence, and ownership of businesses, whereas male entrepreneurs were more focused on monetary returns. Birley (1988) and Eusuf et al. (2017) suggest the need for money is often the main motivation for women to become entrepreneurs.
Several authors, for example, Chowdhury (2006) and Tambunan (in Ahmed, 2014), categorised the primary motives of female entrepreneurs on the basis of pull (positive) and push (negative) factors. Push factors included the restrictive nature of the labour market, glass ceiling career problems, and the loss of a male guardian (the husband or the father). Pull factors included independence, challenge, economic and industrial incentives, and family inspiration. All were reasons for women moving towards entrepreneurship and business. In Nigeria, Kenya, and Senegal, circumstances forced between 30% and 60% of unemployed women to launch small businesses as a source of earnings (IFC, 2011).
Research by the Global Banking Alliance has confirmed that female borrowers’ microfinance and commercial banking payback rates are good compared with those of male borrowers (Cutura, 2010). Nonetheless, research by the Diana Project suggested that, globally, female-owned firms owned less than 10% of the venture capital industries (Welter, Brush, & De Bruin, 2014). Another study (Morris, Miyasaki, & Watters, 2006) found that, globally, a burst of venture capital financing occurred between 1996 and 2004, but female-owned businesses received only 4% of available investments.
A research project by Muravyev et al. (2009) between 2004 and 2005, based on data from the European Bank for Reconstruction and Development and the World Bank Business Environment and Enterprise Performance Survey, used a multicountry database of 14,000 firms. It found that women-managed firms have 5.4% lower probability of securing a bank loan than their men-managed counterparts and are charged, on average, 0.6% higher interest rates (Irwin & Scott, 2010). The authors concluded that this gender discrimination against female entrepreneurs by FIs might be a discouraging factor for women-managed firms. Marlow and Patton (2005) established that the gender bias of FIs has entrenched the inferior status of most female entrepreneurs. Pfefferman and Frenkel (2015) suggest that this is why less venture capital has been raised by women.
Marlow (1997) estimated that in the United Kingdom, the supply-side finance gap affected 32 male-run enterprises as against 43 female-run enterprises in the study. A study by Kaur and Bawa (in Sinha, 2005) on seven South Asian countries established that female entrepreneurs receive less than 10% of formal credit. Roper and Scott (in Bosse & Taylor, 2012) showed that as a consequence of this gender discrimination, women tend to encounter 7.4% more challenges for their businesses at start-up than do men.
Some researchers, for example, Coleman (2007) and Hulten (2012), noted that bankers prefer lending to large, well-established firms. This drastically hampers financial support to female-owned businesses, which are often home-based and less growth-oriented and less profitable than firms owned by men (Morris et al., 2006). Riding and Swift (in Fischer, Reuber, & Dyke, 1993) and Carter (2000) all found that collateral requirements for lines of credit were higher for female-owned small businesses than for male-owned businesses.
Aldrich (1989) and Santos, Roomi, and Linan (2016) found that female-owned firms faced constraints that meant they built smaller networks, which might limit their access to credit. Irwin and Scott (2010) and Welter et al. (2014) established that weak social networks contribute to women’s initial undercapitalisation, which may in turn lead to underperformance of female business owners (Carter, 2000; Marlow & Patton, 2005).
Entrenched, male-dominated hierarchies in the financial sectors of many countries, including Bangladesh, are major barriers to women participating in business. Despite much work in the field, research on female entrepreneurship in Bangladesh has until now not used a concrete theoretical framework to evaluate the impact of gender bias on CMSME financing. This has made it difficult to identify the root causes behind the challenges and obstacles faced by women in CMSME financing in Bangladesh. This article addresses this gap.
Drawing on a liberal feminist perspective, this article shows that, because of the predominantly male culture at managerial levels of society, overt discrimination and structural barriers make it difficult for women to access resources to bring economic progress in Bangladesh. The rights of female entrepreneurs to obtain loans from banks and FIs have been inhibited by traditional legal systems, traditional models of inheritance, unequal treatment of women by lenders, and institutions’ acceptance and even cultivation of patriarchal outlooks and gender-biased norms. In addition, inadequate managerial training and technological inexperience and lack of business experience and networks hamper women’s business performance (Brush et al., 2014; Harrison & Mason, 2007). Traditional masculine practices tend to keep women socially and economically dependent on men (Sinha, 2005). This is why management positions in organisations have become (and remain) masculinised, and this has encouraged women’s marginalisation (Acker, cited in Pfefferman & Frenkel, 2015). This gender segregation of roles has reduced the capacity of women to be economically self-sufficient and made it difficult for them to be entrepreneurs. Consequently, female entrepreneurs have limited access to formal credit, which in turn constrains their ability to participate in CMSME business activities.
3 THEORETICAL FRAMEWORK
3.1 Liberal feminism
Liberal feminism is the primary theoretical structure used in this article. It advocates equal rights for men and women. It was first expressed in 18th-century Europe during the Enlightenment (Fischer et al., 1993). Well-known thinkers of liberal feminism include Mary Wollstonecraft (18th century), John Stuart Mill and Harriet Taylor (19th century), and Betty Friedan and Rebecca Walker (20th century). All grappled with male-dominated power structures (Carter & Williams, 2003; Tong, 2007).
As highlighted by liberal feminist theorists, male-controlled organisations and societies impose structural barriers that prevent women benefiting from power, opportunities, and resources such as education, finance, networks, business experience, management training, and property rights (Carter & Williams, 2003; Fischer et al., 1993; Tong, 2007). The theory argues that women were more likely than men to be deprived of the chance to develop their full intellectual capacity and so were less able to compete in male-dominated entrepreneurial activities and less able to increase their status.
The liberal feminist school has been criticised for ignoring the gendered division of labour, both in the home and at work. The division is highly pertinent to systematic differences between men and women in economic and business achievement (Greer & Greene, 2003). Another limitation of the model is that it has often used the values and experiences of upper-middle class white women as the benchmark for all women (Ahl, 2004). Even so, liberal feminism has led to the advancement of rights and freedoms of millions of women across the globe. Liberal feminist theories have made significant contributions to improving women’s position in family and society and in the economic, health, and education spheres. At the same time, feminism has contributed to educating women about their rights and upholding their status in society.
Feminist liberalism has contributed to halting legal discrimination and lowering institutional barriers in many countries, helping to give women the same business opportunities as their male counterparts. If enforced, laws inspired by a philosophy of liberalism and equality bring about major changes.
3.2 Feminist liberalism and entrepreneurship
By emphasising the importance of gender equality, feminist liberalism has been influential in reducing discrimination against females and abolishing certain biases against female entrepreneurs. It has provided the basis for many legal changes that have brought about greater equality for women and as such is a useful response to the persistence of institutional barriers to gender equality (Greer & Greene, 2003). A good example of liberal legal reforms is The Equal Credit Opportunity Act of 1974 in the United States. The Act opened up unbiased lending opportunities that ultimately brought a dramatic rise in the number of female entrepreneurs (Ahl & Nelson, 2015). In turn, lenders have developed positive attitudes towards approving loans for women. A report by the Center for Women’s Business Research on ‘Economic impact of women-owned businesses in 2009’ estimated that, as of 2008, over one-fourth of all businesses in the United States were owned by women, and they had contributed US$1.3 trillion in sales and employed 13 million people in the United States. A study by Robb and Watson (2012) in the United States found no significant gender differences (since the antidiscrimination legislation was brought in) in the performance of male- and female-owned businesses in terms of survival rates, return on sales, profits, or risk–adjustment ratios of newly established firms. Zolin, Stuetzer, and Watson (2013) found similar results in Australia.
Liberal feminism emphasises that removing systemic biases against women benefits all of society, so adopting such a model is logical when we want to facilitate women’s equal access in market participation (Carter & Williams, 2003). When governments, guided by ideas such as liberal feminism, take steps to address inequalities, change for the better is possible. The National Association of Women Business Owners in the United States reported that of the 6.5 million female entrepreneurs in the United States in the early 1990s, 67% found it hard to work with FIs. This figure had declined to 15% by 1997.
Since 1995, the National Association of Women Business Owners and Wells Fargo Bank have worked in partnership and loaned US$38 billion to 750,000 female entrepreneurs, who then started to grow their businesses at rates more similar to their male counterparts, narrowing the revenue gap. Consequently, there was no gender gap in revenue in 8.5 million companies with US$5 million or more in revenues post-1997. Another notable example is the Mecklenburg–Western Pomerania State Investment Bank in Germany. The bank has given special attention to disbursing credits directly to female entrepreneurs—previously, the needs of women in receiving bank loans were often considered less important.
Thus, we see that liberal feminism serves as an overarching framework to shape legislative and regulatory reforms that assist women to become entrepreneurs. Individual changes are useful, but liberal feminism provides an overall structure to evaluate and coordinate reforms, making them more effective.
4 POLICIES FOR THE DEVELOPMENT OF FEMALE ENTREPRENEURS OF CMSMES IN BANGLADESH
In 2007, the Bangladesh Government created the Small and Medium Enterprise Foundation (SMEF) under the Ministry of Industry, and in 2008, the Ministry of Women and Children Affairs gave emphasis to developing women’s entrepreneurship in CMSMEs as a part of National Action Plan. The SMEF developed a 5-year Gender Action Plan for female entrepreneurs to increase their skills in loan certification processes, business information, and marketing.
The SMEF works in partnership with government agencies, donors, the banking sector, and nongovernmental organisations (NGOs) and support agencies to boost the knowledge, capacity, and experience of female entrepreneurs in CMSMEs. The result is better integration and coordination of the efforts of different stakeholders. Moreover, in the National Industrial Policy 2010 and the Seventh Five Year Plan of 2016–2020, the Government of Bangladesh facilitated credit opportunities for female entrepreneurs to enhance their participation in business activities. BB has established a fund to finance women in CMSMEs through banks and FIs in rural and urban areas, with the aim of generating employment by providing venture capital support for entrepreneurs with a sound business plan.
In light of the Industrial Policy 2016 of the Bangladesh Government, BB groups CMSMEs in several ways (SME & Special Programs Department [SMESPD] circular No. 02, 2017; Appendix D). BB defined a female entrepreneur as a woman engaged in business in her own name (SMESPD circular No. 01, 2011). A woman can be termed a female entrepreneur if she is an owner or proprietor of a private or proprietary enterprise, director of a registered private company, or owner of at least 51% of an enterprise’s shares. Female-owned micro and cottage industries are considered SME enterprises, and they will receive all the special facilities, including a grace period, provided to female entrepreneurs (SMESPD circular letter No. 03, 2017).
In 2015, BB issued a circular to encourage innovation and capacity building to facilitate the entry of new female entrepreneurs (SMESPD circular No. 02, 2015). To do this, every year, all branches of banks and FIs would select three female entrepreneurs who were not yet receiving formal loans and give them targeted training for capacity building, as well as access to finance and markets, technology and production planning, support services, and information. At least one female entrepreneur would be chosen to receive a CMSME loan.
BB Circular No. 01 Article 2 (2.3) instructs that at least 10% of the amount loaned to CMSMEs should go to women (SMESPD, 2016), and this should be increased up to 15% by 2021 (SMESPD circular No. 03, 2017). Female entrepreneurs are allowed to form groups to help obtain loans of BDT0.05 million or more (SMESPD circular letter No. 05, 2010). BB has initiated an individual/group-based ceiling of BDT2.5 million for CMSME loans to female entrepreneurs (SMESPD circular No. 01, 2016), but, in 2013, BB reported that only 10.4% of branches of banks and FIs delivered group-based loans to women. In Bangladesh, microcredit programs have used group-based approaches, where collective responsibility made the group members more accountable for recovery of the loans (Hashemi, Schuler, & Riley, 1996).
In a series of circulars beginning in 2008, BB announced the reservation of 15% of the total refinance fund for women (Agricultural Credit & Special Programs Department circular No. 06, 2008). This refinance scheme has maintained an interest rate ceiling of the existing bank rate (5%) plus a maximum spread of 5% (SMESPD circular No. 01, 2010), later revised to a base rate of 9% with a 4% spread for women (SMESPD circular No. 01, 2017).
5 CMSME LENDING TO MALE AND FEMALE ENTREPRENEURS BY BANKS AND FIS
Banks and FIs are the largest sources of formal CMSME lending to both male and female entrepreneurs in Bangladesh. Since 2010, data on lending by banks and FIs for CMSME financing to male and female entrepreneurs have been collected by BB. From 2010 to 2018, banks’ and FIs’ loans to male business owners were higher than to female business owners (Appendices A–C).
Figure 1 shows that over the period, the total value of loans to female entrepreneurs increased by around 206%, from BDT18,050 million to BDT55,171 million. At the same time, loans to male entrepreneurs increased by 198%, from BDT517,389 million to BDT1,539,930 million (Appendix A). The fractional increases are therefore similar for both, but because the males began with a much higher base in 2010, the gap has almost tripled in absolute terms. This is the opposite of what would be expected if gender inequality were being addressed. This is strongly suggestive of gender discrimination by the banks and FIs and the lack of effect of the measures outlined above.
6 BARRIERS TO IMPROVEMENT
Why, despite changes in policy and initiatives by BB and others, has the support for female entrepreneurs not improved? It appears that banks and FIs have not played significant roles in the promotion of female entrepreneurs. Women face systemic disadvantages and institutional barriers and have fewer opportunities than men have to get access to institutional credit. Here, we explore reasons behind this.
6.1 Lack of a personal guarantee
Currently, loans given to female entrepreneurs must be guaranteed by the husband (father of the family). This should not be a legal obligation (Ahmed, 2014; Brush et al., 2014). In most cases, female entrepreneurs must rely on personal savings and financial assistance from a parent or spouse to begin their business career (Marlow & Patton, 2005).
Recently, the Bangladesh Government, the United Nations Capital Development Fund, and BB combined to provide a credit guarantee scheme (CGS) of US$0.2 million to support SME female entrepreneurs. BB guarantees 30% of total borrowings, but women still require collateral (property, cash or cash equivalents, machinery, and other assets) to obtain loans, so the CGS fails to deal with a major issue.
6.2 Lack of legal documentation
Female entrepreneurs often encounter difficulties meeting the paperwork requirements for receiving loans. Because of fewer opportunities for education and work experience, they lack knowledge about financial management and maintaining proper documentation (Ahmed, 2014).
6.3 Lacking experience in preparing loan proposals
Women entering entrepreneurship are less likely to have prior business experience than are men, and this lack has a negative impact on the financial success of female-owned firms (Ahl, 2004; Coleman, 2007). Entrepreneurial experience leads to greater access to financial and social networks, which in turn makes a significant contribution to female entrepreneurs’ business growth and development (Coleman, 2016). Unfortunately, it is difficult for women to gain that experience and build those networks in the first place (Ahmed, 2014; Brush et al., 2014).
6.4 Lack of collateral and high rates of interest
In Bangladesh, 97% of women in business (compared with 25% of men) used their homes as business premises; this is especially common in rural areas (IFC, 2011). Loan applications by female entrepreneurs are frequently denied by the banks and FIs because they offer household assets as collateral. The World Bank’s World Development Report 2012 shows this to be one reason why use of credit by female-owned firms is lower than by male-owned firms. About 70% of Canadian female-owned businesses started with home-based activities (Mirchandani, 1999).
Further, the higher interest rates faced by women accessing formal financing increases production costs, making it harder to deliver competitive market products (Goyal & Yadav, 2014; Irwin & Scott, 2010). More than 29% of female entrepreneurs have complained of the high cost of borrowing, whereas only 19% of men did so. Similarly, just 1% of women have applied for a loan, as against 14% of men (IFC, 2011).
6.5 Lacking managerial capacity and technological education
Higher education and formal training provide good foundations for women to develop their entrepreneurial skills (Brush et al., 2014; Carter, 2000; Coleman, 2007; Marlow & Patton, 2005; Zolin et al., 2013). In Bangladesh, however, conventional thinking and gender-segregated education prevent women gaining technological knowledge and managerial expertise and so create gender-based divisions that restrict the economic participation of women (Chowdhury, 2006; IFC, 2011; Ahmed, 2014). This leaves only low-return activities open to female entrepreneurs. Welter et al. suggest
The uneven participation of women in traditional male-dominated and often high technology sectors is due to structural factors in the economy that prevent women from gaining experience, access to markets, or resources. This extends to the glass ceiling, where women are often denied the chance to gain high-level managerial decision-making experience which could be beneficial in an entrepreneurial start-up (2014, pp. 8–9).
6.6 Societal factors
The joint study conducted by Micro Industries Development Assistance and Services and SMEF in 2009 showed that there is a positive relationship between women’s entrepreneurship and the economic prosperity of Bangladesh. Nevertheless, Bangladeshi society considers women below men in the economic sphere and denies them the experience and education that would give them the ability to compete. Bank managers are then more reluctant to lend to female entrepreneurs than to men because women are considered a greater loan risk (Ahmed, 2014; Coleman, 2016). As a result, women do not get the loans and do not get the experience of running a business, and so the cycle repeats.
Similarly, inequitable educational opportunities and workplace practices, and social values that say women should stay in the home, result in few women reaching management positions in banks and FIs. Thus, all the decisions about loans are made by men, and again the cycle is perpetuated.
6.7 Laws and policies: The absence of gender rights
Existing patriarchal inheritance rights prohibit women from owning lands or inheriting property. 3 In Bangladesh, inheritance is generally stipulated by Sharia (Islamic law) practices, in which women are not entitled parity and inherit only half as much as their male counterparts (Kieran, Sproule, Doss, Quisumbing, & Kim, 2015). This limits women’s access to capital needed for entrepreneurship—they have less money and less collateral when seeking credit (Ahmed, 2014). The IFC (2011) reported that only 20 countries among 136 consider differences between men and women’s economic rights to be legal. Bangladesh is a signatory to CEDAW, the convention on the elimination of all forms of discrimination against women. However, it maintained reservations on article 13(a), which asserts equal rights for women regarding family inheritance. This reservation violates the “right to bank loans, mortgages and other forms of financial credit” mentioned in article 13(b) of the CEDAW convention.
Women’s rights to earn income, obtain loans, and own property are acknowledged in Clause 25(2) of the Bangladesh National Policy for Women in Development 2011, but the law explicitly excludes the provision of equal rights for women in matters of inherited property. Implementation of such rights has been prevented by extremist religious forces that challenge the supremacy of the constitution, constrain women’s emancipation, and threaten to impose social and political restrictions on women in the name of Islam. Impediments to change come from regressive forces and traditional conservatism in communities and governments and from the weakness of the state administration. These factors have often slowed down steps for the improvement of the well-being of the society.
7 RECOMMENDATIONS AND CONCLUSIONS
Nobel laureate economist professor Mohammad Yunus said “credit is a human right” (Brigg, 2006, p. 66). Article 28(2) in the Constitution of the People’s Republic of Bangladesh 1972 provides for equal rights and privileges for women, but, because of traditional legal systems and inadequate policies and regulation, mainstream institutions have not prioritised female entrepreneurs nor given them access to resources that enable economic development. This gender bias has inhibited women from full economic participation and achieving their fundamental rights.
If we examine the barriers to improvement noted above, one factor is common to all: inequity. Equality of rights for men and women, central to liberal feminism, is not in place in Bangladesh. Fewer opportunities for education and training means women often lack skills in business administration and dealing with FIs. Inequitable inheritance rights cause a lack of financial resources, and societal attitudes keep women out of positions of authority, meaning they lack influence over decision making.
All these factors can be tackled by better implementing the fundamental tenets of liberal feminism.
7.1 Financial institutions
As the banking regulator, BB could implement a credit policy that ensures better access for female entrepreneurs to finance from banks and FIs. Specifically, BB could initiate proper implementation of existing policies and regulations on financing for female entrepreneurs in the CMSME sector. BB should make a specific, ambitious target for banks and FIs to deliver loans to female entrepreneurs in the CMSME sector and—vitally, given the trend shown in Figure 3—see that the target is met.
BB must introduce a training and awareness program for employees at all banks and FIs to make them sensitive to gender. BB could encourage banks and FIs to recognise the extra difficulties faced by female entrepreneurs and to tune their lending practices accordingly. They could provide more collateral-free loans to female entrepreneurs, for example, and loans that are already sanctioned by them could be secured by group security or social security rather than personal guarantees.
Women constitute the lion’s portion of NGOs’ beneficiaries, so NGOs could be involved by banks and FIs in the credit wholesaling process, with a single digit rate of interest, to assist financing female entrepreneurs at the local level.
BB could insist on female entrepreneurs’ educational certificate(s) being preserved as security or collateral on receiving loans from banks and FIs. BB can compel banks and FIs to use a “Separate Cell” approach to implement a cluster development policy that can identify promising products and provide financing to selected groups of female entrepreneurs.
Only positive steps can break the existing cycle in which female entrepreneurs cannot get loans because they lack a record of accomplishment and they lack a record of accomplishment because they cannot get loans.
7.2 Government
Women’s entrepreneurship reinforces the economic autonomy of women, promotes gender balance, and ultimately leads to participation of women in broader decision-making processes. However, it cannot flourish without some sensible support. Because so many of the problems faced by women are self-reinforcing—for example, a lack of female mentors and decision-makers in business results in fewer women succeeding, which results in a lack of female mentors and decision-makers—the government must step in and take an active role in changing the status quo.
Given the lack of progress in lending to women (illustrated in Figures 1–5), the Bangladesh Government must actually implement the National Policy for Women in Development 2011. These reforms would aid in women’s emancipation, giving them greater independence and opportunities to move out of the home and use their entrepreneurial talents in CMSMEs.
It is vital that The Ministry of Law enforce and, where necessary, amend inheritance laws to guarantee women’s financial rights. This is particularly true of their rights to property, wages, and inheritances, which must be equal to those of men.
The Ministry of Industry should adopt a comprehensive, sustainable industrial policy to promote female entrepreneurship. The Ministry of Trade could simplify the regulations around trade licences and create awareness among female entrepreneurs of the necessity of having a trade licence. Via the city corporations and municipalities, it could also provide information to female entrepreneurs about company registration and types of licences. The National Board of Revenue should arrange training for female entrepreneurs to help them manage their taxation commitments. The Bangladesh Women’s Chamber of Commerce and Industry could do more to promote female entrepreneurship and its value to the nation in a wider context.
Rosenthal (1998) argued that the influence of women is indispensable for successful policy implementation. So, policy initiatives must be introduced to enhance the participation of women in the country’s mainstream economy (Ahmed, 2014). Technology, gender awareness, and managerial skills training should be made readily available to women, possibly through industrial–academic collaboration. This would encourage innovation and networking and accelerate technological progress to facilitate the entry of new female entrepreneurs in the CMSME sector of Bangladesh.
Stakeholders such as donors, the SMEF, and women’s chambers of commerce could be required by the CGS and the government to provide some percentage of financial support to the CGS as a mandatory contribution to limit the effects of failure of recovery of loans to women. The incorporation of more female entrepreneurs on boards and into positions of influence with organisations such as the SMEF, BB, and the CGS would provide role models and mentors for other women and begin the process of cultural change.
Regarding finance to female entrepreneurs, donors’ financial support and technical assistance is needed for building human capital for efficient management of CMSME businesses. However, the Bangladesh Government should take on the responsibility of designing and implementing a funding program to ensure efficient allocation of resources to female entrepreneurs, without direct involvement of donors (Mintrom, 2012).
7.3 Social reforms
If access to credit is a human rights issue, then it cannot be tackled in isolation. There are deep-seated attitudes in Bangladesh that inhibit the financial and social reforms—such as equality of access to inheritance—demanded by liberal feminism, reforms that would benefit all of society. It must be acknowledged that governments can make new laws, but changing the thoughts and habits of a large fraction of the population is a task that can take generations. When such changes are opposed by a powerful religious lobby, the task becomes daunting indeed.
It is important to relieve women of the burden of household chores and traditional, outmoded gender roles (Ahmed, 2014). Males and females must have equal educational opportunities, so both are prepared and able to accept entrepreneurial challenges. This is not just a matter of providing schools but of educating fathers, husbands, and brothers that their wives, sisters, and daughters have the right to do more than work in the home—they have the right to make the most of their abilities.
In other words, there must be a wider appreciation of the need for and value of reforms that grow out of liberal feminist ideas.
7.4 Summary
Female entrepreneurship could be a large source of employment in Bangladesh. Viewed through a liberal feminist theoretical lens, we can see that some of the building blocks for successful female entrepreneurship exist in Bangladesh, but they have not been put into effect. Many of the laws are in place, but much remains to be done. Existing laws must be implemented, others tuned or rewritten (such as those around inheritance). Much of society does not recognise the rights of women to work and gain their independence, and those attitudes are deeply held. Releasing the potential of CMSME female entrepreneurs is an important means to bring positive changes in the socio-economic development of Bangladesh but may only be possible as part of broader social reforms.
ACKNOWLEDGEMENT
The author is grateful to Fiona Yap PhD, associate professor, Crawford School of Public Policy at The Australian National University for her excellent suggestions, constructive criticism, supervision, and guidance in preparing the manuscript. The views expressed in this publication are those of the author and not those of the BB.
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