Women entrepreneurs need special financial support

Women entrepreneurs are demanding special allocations of working capital and other financial support from the government to recover from losses suffered from the Covid-19's fallout. Most of these entrepreneurs have been forced to downsize their businesses while others have shuttered operations entirely, leading to increased unemployment.

Without government support, women entrepreneurs will not be able to stay on course, according to Selima Ahmad, president of the Bangladesh Women Chamber of Commerce and Industry (BWCCI).

"The pandemic forced a large number of female entrepreneurs to lose their income," she said while conducting a webinar on the "Impact of Covid-19 on women entrepreneurs in Bangladesh" organised by the chamber on Wednesday.

During the peak pandemic period between May and June, many businesses had to be kept shut but the owners still had to pay rent, tax, utility bills, salaries and so on. As a result, many female entrepreneurs faced social, economic and mental challenges, including domestic violence, she said.

But even though the economy has recovered to a certain extent, many of these women entrepreneurs have not been able to do the same. This is because many foreign buyers cancelled their orders, making it difficult for the businesswomen to renew their trade licenses as the associated fees are high, Ahmad added.

Husne Ara Shikha, general manager of the SME & Special Programmes Department at Bangladesh Bank, said the central bank does not offer any special service with low interest rates for women. According to her, there are dedicated loan benefits for small and medium entrepreneurs (SME) which includes a 15 per cent quota for women. Certain requirements also need to be met for women to secure special loan facilities, Shikha added.

Besides, the central bank has so far disbursed 6 per cent of a Tk 20,000 crore stimulus package among female entrepreneurs while the target was only 5 per cent. The general manager went on to assure that action would be taken against commercial banks that harass loan-seeking women entrepreneurs. Shikha also pointed out that the women entrepreneurs could have borrowed from another Tk 1,500 crore stimulus package available at three per cent interest. However, no women entrepreneurs have applied for this package, she said.

"There is a gap between women and bankers so we should try to minimise this gap and upgrade women's skills and capacity so that no bank can refuse them loans," she added. Shikha also said there was an upcoming opportunity in the IT sector for entrepreneurs who do not have a trade licence as they would still be able to avail a Tk 10,000 loan through bkash.

Similarly, Md Mubarak Hossain, deputy general manager of the SME & Special Programmes Department, agreed that the allegations of women facing troubles in availing SME loans were true. The central bank directed the country's lenders to consider loan applications from female entrepreneurs even if they did not have considerable transactions in the preceding two years, he said.

During the pandemic, 27,657 women have been brought under the refinancing scheme disbursing Tk 3,308 crore. The women who availed this facility were all small entrepreneurs, Hossain added. Many women entrepreneurs have been unable to restart their businesses due to a lack of working capital, said Sangita Ahmed, the chamber's senior vice president. "With limited financial and operational capacity, women entrepreneurs have fallen into a dire situation during the crisis," she added.

Ahmed also said during this period, women faced problems in their households and suffered acute mental stress.  Veena Vidyadharan, a fellow of the Consumer Unity & Trust Society in Jaipur, India, said on an average, almost all female entrepreneurs incurred huge losses. This is because they could not take any measures beforehand to help cope with the various business-related challenges that came up amid the pandemic.

And so, they were forced to take loans from relatives, non-government organisations and their dealers in anticipation of the yearly festivals but due to the pandemic situation, they could not sell those products. "Here they faced a big loss but still had to pay back their loans with interest," Vidyadharan said, adding that many had to sell their ornaments and other assets to make ends meet. Women entrepreneurs from eight divisions informed that their export and import operations had totally been halted due to border closures and flight cancelations.

They also alleged that there were no special facilities for women entrepreneurs even though the government declared a stimulus package for businesspersons. "That's why we are facing problems to take bank loans and this package is also not for women entrepreneurs of startups," they said.