Banks open up to women
March 4, 2010
Women entrepreneurs’ access to bank loans has increased manifold, thanks to the government’s decision to set aside 10 percent of SME funds for them.
Bangladesh Bank statistics show the number of women beneficiaries under a refinance scheme was fewer than 100 in January 2009, but the figure reached 211 in May, 326 in August and 498 in December of the same year. Two years ago, it was only one.
Loans disbursed among the women beneficiaries were Tk 13.8 crore in May, Tk 22 crore in August and Tk 35.4 crore in December last year.
“Fund utilisation increased significantly last year mainly because of allocating 10 percent of the SME fund for the women,” said Sukamal Sinha Chowdhury, general manager of SME and Special Programmes Department of the central bank.
The central bank introduced a refinance scheme for SMEs (small and medium enterprises) in May 2004, using three sources of funds — Tk 10 crore from BB’s own resources, $20 million (Tk 140 crore) from the International Development Association under enterprise growth and bank modernisation project and Tk 3 crore from Asian Development Bank.
Now the central bank has around Tk 1,200 crore under different funds dedicated for SMEs and women entrepreneurs.
All scheduled banks and non-bank financial institutions are eligible to avail themselves of this facility at a 5 percent interest rate.
Lack of credit is one of the major problems facing Bangladeshi women from starting or expanding businesses. Banks also declined to lend them on the grounds of collateral.
Following the situation the Bangladesh Bank reserved 10 percent of its SME sector-refinancing fund for women entrepreneurs in an attempt to more female participation in trade, commerce and productive sectors.
However, a leader of a forum of women entrepreneurs alleged that women who run small businesses are not getting bank loans.
“Banks lend to medium enterprises, not small ones who need it the most,” said Nasreen Awal Mintoo, founder president of Women Entrepreneurs Association of Bangladesh (WEAB) that represents 7,000 entrepreneurs across the country.
Nasreen said she has very recently seen in Cox’s Bazar that small women businesses are crying for finances to run their small enterprises.
According to BB data, mid-term (three years) refinance loans for women rose by 224 percent, short term 118 percent and long-term 100 percent in one year.
Sukamal Sinha Chowdhury however said the BB is seriously considering sorting out the problems the SMEs and the women entrepreneurs are facing to have access to bank finance.
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