Challenges for women entrepreneurs

Throughout the world, in any development undertaking of a nation, women's empowerment is an inevitable part of economic development discourse. Since women's empowerment depends on taking part in various development activities, it is therefore observed that the involvement of women in various entrepreneurial activities has empowered them in social, economic and cultural fields. In Bangladesh, women constitute above 10 percent of the total number of entrepreneurs in the country. Many women have surpassed their male counterparts in the small and cottage industries, especially the handicrafts sector; while many courageous entrepreneurs have excelled in Small and Medium Enterprises (SMEs). Women have ventured in RMG, light engineering and pharmaceuticals, guiding others to compete in a man's world. However, despite recent progress in advancement and empowerment, the majority of women still remain vulnerable to poverty and social deprivations. Women entrepreneurs are in a less favourable position compared to men in terms of accessing commercial credit from formal financial service providers, more lucrative markets than the traditional local ones, and technology and information to establish and grow their businesses.

Women entrepreneurship has been recognised as an important source of economic growth, creating new jobs for themselves and others and providing society with different solutions for management, organisation and business problems. They still represent a minority of all entrepreneurs, facing gender-based barriers to starting and growing their businesses, such as discriminatory property, matrimonial and inheritance laws and cultural practices; lack of access to formal finance mechanisms; limited mobility and access to information and networks, etc. Women's entrepreneurship can make a particularly strong contribution to the economic well-being of the family and communities, poverty reduction and women's empowerment. Bangladesh is a developing country, and the women of Bangladesh are deprived and discriminated for many reasons. But it is an optimistic turn of events that they are now in a position to empower themselves.

Women entrepreneurs of Bangladesh

Through the years, Bangladesh has achieved excellence in its economic order, educational development, social changes and living standards. The dark ages of keeping women behind doors have given away to female empowerment, through educational and income earning opportunities. The greatest advancement is observed as women's increasing participation as entrepreneurs, within Bangladesh and also in the international arena. Women have braved family and social systems to venture into entrepreneurship both in the urban and rural areas. The business activities differ but the performance is commendable against the social and cultural restrictions for women in Bangladesh, including the tremendous odds surrounding the socioeconomic order.

In Bangladesh, women entrepreneurs have an edge over male entrepreneurs which matters to investors. One of the most obvious reasons to invest in women leaders in Bangladesh is that women control the vast majority of household spending. So unless the business is one that is focussed mostly on men, women are more likely to understand the customer's perspective. Women are often better at building long-term relationships than men. Lasting relationships benefit a business tremendously, as much as can be achieved with trust between employees, customers, suppliers, shareholders, government, etc. Since entrepreneurship is a critical driver of innovation and economic growth, fostering entrepreneurship is an important part of economic growth strategies in many local and national governments around the world.

Female entrepreneurship in Bangladesh has witnessed many a transformation. Initially, business ventures were taken up by the educated upper class men who invested their own money to build fortunes. Then educated women followed and a few have made a significant mark over the years. Many uneducated women today are enthusiastically raising family incomes through micro ventures and reinvesting their earnings in their families and communities. These women also inspire other women in their localities to pursue their dreams through entrepreneurship at the grassroots level. Even though they do not undertake their businesses at a commercial level, they are breaking barriers and inspiring other women to become self-reliant.

Like other developing nations, Bangladesh has been focussing on the most disadvantaged group in the society—women. Realisation that a society cannot afford to waste half of its human resources by discrimination on grounds of sex has gradually dawned. This increasing awareness on the part of the government has led to the adoption of national policies to facilitate a development process involving women in all spheres particularly in economic activities focusing especially on entrepreneurship development. The majority of women are not only poor, but also caught between two vastly different worlds—the world determined by culture and tradition that confines their activities inside family homesteads, where they are regarded more as a commodity necessary only for bearing and rearing children, and the world shaped by increasing landlessness and poverty, which places them outside the home into various economic activities for survival. Women entrepreneurs, who have accepted the challenges of life and have emerged as leaders in the socioeconomic development in Bangladesh, earn for themselves and for their families or contribute towards the socio-political development of the women.

Constraints and challenges

Women entrepreneurs commonly face many obstacles when building a business. Three common obstacles identified as the most challenging are: overcoming bureaucracy, hiring talent and acquiring financing.

Entrepreneurship was once considered a man's domain, but the tide has shifted. Although more women are becoming entrepreneurs, they often face a set of challenges not typically shared by their male counterparts. Some of the key challenges faced are:

1. Defying social expectations

2. Limited access to funding

3. Owning your accomplishments

4. Building a support network

5. Balancing business and family life

6. Coping with a fear of failure

Issues of economic problems, family-related concerns, social constraints, and other limitations faced show that women involved in various small and medium enterprises have to undertake the challenge to work in a male-dominated society and a competitive, complex business environment.

Though various initiatives exist, challenges of inadequate capital, sales promotion, permission for starting a business, gender discrimination, illiteracy, lack of business knowledge among women, non-availability of training programmes and technical support, lack of managerial experience, continue to create problems. Personal qualities such as hard work and perseverance, management skills and marketing skills, and support provided by their spouses or family are the main reasons behind the success of the women entrepreneurs. The level of participation of women in mainstream economic activities remains insufficient and the percentage of women in business is still much below that of their male counterparts, especially in rural settings where women lack assistance in the access to credit, provision of skill training, and market facilities.

Mainstreaming problems of women in industrial activities hampers women's contribution towards economic growth and their empowerment. To support women's entrepreneurship development in order to release their creative potentials as entrepreneurs, innovative and specialised support services are needed. Specialised funds and programmes are undertaken to facilitate credit towards small businesses, but in practice, entrepreneurs are required to offer collateral to guarantee loan repayment, which creates problems. Majority of women do not possess any assets and cannot formally offer the necessary securities against loans.

The challenging situation of women's entrepreneurship in Bangladesh is due to the complexities in the social environment and administrative structure. Many social and operational constraints continue to restrict women from starting and running economic enterprises.

Training opportunities by government and NGO facilities exist for entrepreneurial development, are not available everywhere. The majority of rural women have little knowledge on entrepreneurship development. Sometimes for reasons of personal requirements or the welfare of their families, the need to earn instigates women towards entrepreneurship. However, most of them have little idea about maintaining a business, production, acquiring raw materials, marketing techniques, book-keeping, and obtaining warehouse requirements.  

Starting a venture is risky as acquisition of business financing is a major challenge. Women entrepreneurs overcome this obstacle by minimising inventory and factoring receivables since the majority of women are lone actors struggling to get small businesses off the ground.

Uneducated women entrepreneurs, especially in rural areas, still do not have access to technical and financial support that can give a boost to their businesses from the domestic level to the commercial. There are cultural and societal norms that hinder equal participation of women in ventures.

Acquiring funds through traditional sources such as bank loans also have various problems. Most rural women have lower access to banks. They use personal or household savings, or borrow from friends, relatives, or even money lenders at high interest rates. Urban banks don't assist most women due to a lack of references. Banks require guarantees for female entrepreneurs' business loans and most husbands are not supportive in this regard. Sometimes husbands force their wives to share the loans for household requirements, creating problems regarding business finance and loan repayment.

Bangladesh Bank's circular of providing a BDT 2 million loan for women's businesses did not have many takers. Despite repeated requests, none of the entrepreneurs has obtained this loan from banks.

Restriction of business activities in Gulshan and other areas of Dhaka in 2016 had created great problems for entrepreneurs. The massacre at the Holey Artisan Bakery and incidences of militancy and terrorism have created restrictions for business in different identified areas. Many women had to close down their business activities, leading to great financial loss caused due to the introduction of the new law on business operation restrictions.

Participation in international trade fairs abroad has become a serious problem for women due to the extremely high rate of fees set by the Export Promotion Bureau. This has created financial problems for entrepreneurs who had produced their products for sale at international trade fairs abroad. 

Marketing problems arise when shopkeepers harass women regarding timely payment of the products sold. Sometimes months pass by but the payments are denied. Entrepreneurs based outside the district where goods are sold, find it difficult to collect payment as unnecessary travelling costs incur financial loss on their enterprises. 

Photo: UNDP

Entrepreneurship problems faced by rural women have added a new dimension to the socioeconomic environment of Bangladesh. In view of the need to bring rural women into the development stream of the country, the government, NGOs and related agencies have provided ample opportunities to promote entrepreneurial skill. Income- generating activities, credit facilities, skill training, and market opportunities have all combined to pave the way for the emergence of entrepreneurial development among women in rural Bangladesh which ensures great prospects. But many women are still deprived of these facilities due to the lack of proper information. Challenges of small, cottage and micro home-based industries hinder women's entrepreneurship. Involvement in manufacturing and construction activities of civil works give evidence to their potential regarding market growth opportunities and should be encouraged. Women have emerged as small and cottage industries' exporters and their newfound control of export-oriented industries is promising for further female participation and employment.

Contribution of women in the economy is very important for the growth of the socioeconomic environment of Bangladesh. Without meaningful and active participation of women in regular economic activities, a dynamic and sustainable economy is impossible to achieve. Bangladesh has undertaken systematic reforms across all sectors with an emphasis on initiatives to increase women's participation through laws, international conventions and affirmative activities. Today women have brought about social and economic change and opened up a new dimension in the business arena through their participation in different socioeconomic activities in Bangladesh.

Support services

Importance of women entrepreneurs in the national development process has been acknowledged. The steps to realise these objectives are as follows:

1. Legal assistance for getting trade license and other trade documents

2. Financial support to reduce interest rates, ensure easy access to loans, and guarantor-free loans for women entrepreneurs

3. Marketing assistance to use local products. Market should be created abroad through fairs and other promotional campaigns

4. Technology including continuous product/service quality control, quality enhancement through adopting new technology, tax reduction on imported new machinery, etc.

5. Adoption of business management practices covering a range of activities like HR, employee handling, customer management, recordkeeping, costing, inventory management, procurement, strategic positioning, etc.

Policies and programmes

Government strategies in its National Action Plan (NAP) for the development of women's entrepreneurship include:

1. Adoption of a comprehensive sustainable industrial policy that will promote equity for women and men

2. Setting up a Women Entrepreneurship Development Cell

3. Identification of women entrepreneurs

4. Publication of a directory of women entrepreneurs

5. Ensuring women's easy access to markets

6. Development of entrepreneurial skills of women through Entrepreneurship Development Training

7. Provision of infrastructural facilities for women entrepreneurs

8. Support research, evaluation and action oriented programmes

9. Supporting services for financial and credit institutions

10. Organising women entrepreneurs' conventions

11. Meetings to discuss problems faced

12. Promotion of product development and international marketing

Public and private institutions

Public/government institutions that offer support services to women entrepreneurs include: Bangladesh Small & Cottage Industries Corporation (BSCIC); Women Entrepreneurship Development Programme (WEDP); Bangladesh Rural Development Board (BRDB); Bangladesh Management Development Centre (BMDC); Bureau of Manpower, Employment and Training (BMET); Directorate For Women's Affairs (DWA); Department of Youth Development (DYD); Bangladesh Handloom Board (BHB); Bangladesh Technical Assistance Centre (BITAC); Power Development Board (PDB); Rural Electrification Board (REB); Titas Gas Transmission and Distribution (TGTD); Water and Sewerage Authority (WASA); SME Foundation (SMEF); and Export Promotion Bureau (EPB)

Private institutions and agencies that do the same include: Micro-Industries Development Assistance & Services (MIDAS); Bangladesh Rural Advancement Committee (BRAC); Gonoshasthaya Kendra (GK); Grameen Bank; Bangladesh Small Industries and Commerce Bank Limited (BASIC); Business Advisory Services Centre (BASC); National Association of Small and Cottage Industries of Bangladesh   (NASCIB); Bangladesh Employers' Association (BEA); Women Entrepreneur Association of Bangladesh (WEA); Jatiya Mohila Sangstha (JMS); Bangladesh Women Chamber of Commerce & Industry (BWCCCI); and Bangladesh Association of Women in SME (BAWSME).

Policy recommendations

Entrepreneurship is the key to the creation of new enterprises that energise and revitalise the economy. It serves as a catalyst in the process of industrialisation and economic growth. Women entrepreneurs can play a vital role in combating rural poverty. The emergence and development of women entrepreneurship largely depend on the supporting conditions of economic, social, cultural, and psychological factors. To improve women's socioeconomic status, it is necessary to formulate appropriate government policies, take necessary actions and introduce effective measures to integrate women in the mainstream development process. The government's industrial policies stipulate several useful strategies to broaden the participation of women entrepreneurs:

1. Financial policies and strategies

*Identification of viable women entrepreneurs capable of running independent businesses

*Establishing a credit guarantee scheme for women entrepreneurs

*Sinking interest rate for loans for women entrepreneurs

*Setting up special windows or counters for women entrepreneurs in commercial banks

*Pre- and post-investment counselling for women entrepreneurs

*Allocation of women's share in equity development and fund

*Preferential treatment of credit for women entrepreneurs in thrust sectors

*Monitoring of credit disbursement for women entrepreneurs

*Maintaining gender-based data on credit disbursement and dissemination of information on credit opportunities

*Creation of a one-stop service at the Ministry of Commerce for women entrepreneurs

*Establishing a women's bank

*Enabling credit for women without collateral

*Special market facilities both in the domestic and international arenas

*Reserving plots for women entrepreneurs in industrial parks in all divisional towns

*Promoting female labour-intensive export-oriented production

*Encouraging female entrepreneurs in the export sector

*Honouring best female entrepreneurs by awarding the Annual Export Trophy

*Organise national and international trade fairs for women entrepreneurs

*Fixed quota of stalls for women entrepreneurs at export fairs

*Arranging exclusive fairs to promote products manufactured by small and cottage based units

*Ensuring participation of women entrepreneurs in policymaking, financing, and investment

 2. Counselling and support services

*Linking credit programmes with entrepreneurship development training programmes

*Encouraging women to come up with new products and diversify their products

*Designing various incentive packages

*Giving pre-investment advice and assistance

*Providing financial support and, in special cases, arranging necessary capital

*Establishing a separate bank to ensure easy access to industrial credit, equity capital, venture capital, working capital, and collateral free loans

*Advocating for reducing custom and excise duties for SME women entrepreneurs

*Setting up development banks with separate advisory service cell for women

*Simplifying lending procedures with minimum documentation formalities

*Creating special provisions for female entrepreneurs

*Advocating for insurance facilities for SMEs

3. Other suggestions

*Tax holidays for women entrepreneurs should be extended further and made more supportive

*Gift tax should be removed in the case of women beneficiaries

*Either the registration procedure for import and export business should be simplified and made women friendly or completely dismantled

*All anomalies in custom procedures must be removed and made women friendly

*Tariff for women entrepreneurs should be abolished

*Value Added Tax (VAT) for women entrepreneurs should be abolished

Government and private sector interventions have generally accelerated income-generating activities of women both in the urban and rural areas. Such kind of support services, policies and strategies have helped change the scenario in Bangladesh, especially for the women who gathered the courage to break barriers and enter the formal working force as entrepreneurs and workers.

Women genuinely love their work, are willing to put in those extra hours to make the business succeed, and research ways to make the business better. There is no such thing as a typical entrepreneur. Some entrepreneurs are quiet and hard-working, while others are more outgoing and flamboyant. The key to being a successful entrepreneur lies in the ability to take an idea and, through the process of innovation, develop it in such a way that it becomes a marketable product or service. Both government organisations and the private sector have a major responsibility to promote entrepreneurship development for women. Without that, the advancement of women will remain a distant reality.

The writer is Dean of Sociology and Social Work at The People's University of Bangladesh, former Director of FBCCI & SAARC Chamber, and President of NASCIB Women Entrepreneurs' Council.