Women-run SMEs face 60pc finance gap: Study

Dhaka,  Thu,  21 September 2017
Published : 24 Nov 2016, 00:40:32

Women-run SMEs face 60pc finance gap: Study

Munima Sultana

Despite improvements in policy support to women entrepreneurs in small and medium enterprises (SMEs), the financing gap between the demand and supply of loans remains as high as 60 per cent, according to a new study.

It showed that women's increased involvement in different sectors of SMEs has created a demand of Tk 99.75 billion in capital, including Tk 48.51 billion or almost half in working capital.

But the banks and non-banking financial institutions (NBFIs) were able to provide only Tk 39.68 billion in the fiscal year 2014-15, creating the financial gap, said the study titled 'Mapping market potential and accelerating finance for women entrepreneurs in Bangladesh'.

The FE obtained the study report ahead of its formal release scheduled for today (Thursday).

International Finance Corporation (IFC), the private sector arm of the World Bank Group, with supports from Canada conducted the study on more than 500 women entrepreneurs.  

The study aims at understanding the market share of women-run SMEs, their challenges, potentials and sectoral involvement while providing necessary information to the banks and NBFIs for improving overall scenario.

According to the study, the performance of state-owned commercial and specialised banks, among all the banks and NBFIs, was very insignificant with only five and two per cent share in the total SME loans for women. Private commercial banks performed highest, with 83 per cent share of the small-sized loans.

It also found women's success in non-traditional sectors, including wholesale and retail trade-textile, healthcare and pharmaceutical, agro and food services, establishing dominance in all seven administrative divisions of the country.

The highest financial gap was found in Rajshahi district, followed by Khulna, Chittagong, Dhaka, Sylhet, Rangpur and Barisal.

Though Dhaka still remains focused on parlours, boutiques like personal service-related SMEs, Barisal's dominance are found on healthcare, pharmaceutical, wholesale and retail trade. Wholesale and retail trade-textile is dominated in Rajshahi, Khulna and Chittagong, and manufacturing of wearing apparel in Rangpur and Sylhet.

Besides, Rajshahi remains top among all districts with highest turnover of enterprises, followed by Dhaka, Rangpur, Khulna, Chittaong, Barisal and Sylhet. Annual average turnover of SMEs run by women was Tk 1.6 million with Tk 0.27 million of profit.

Ananya Wahid Kader, who was involved with the study, said that if necessary supports could be provided to the banking sectors as well as women entrepreneurs, the market has potential to disburse additional Tk 12 million in a year.

"There was no case of losses by women entrepreneurs interviewed, which means huge potential of women-run SMEs not only in Dhaka but also other parts of the country," said Ms Ananya, a senior financial sector specialist of the World Bank Group.

According to Bangladesh Bureau of Statistics, women entrepreneurs consist 2.3 per cent of total 7.8 million SMEs in Bangladesh.

To bring changes in the scenario, Bangladesh Bank has so far formulated policies for women entrepreneurs, including loan scheme at single digit interest, 15 per cent of the total SME refinancing scheme for women-run SMEs, Tk 2.5 million collateral-free loans and establishment of dedicated desk for women in the SMEs.

The schemes have helped push up the women share not more than four per cent of the total disbursements.

IFC found that low financial literacy often created obstructions for women in getting the loan.

Editor : A.H.M Moazzem Hossain
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