IFC survey puts annual credit gap at Tk 60b

Dhaka,  Thu,  21 September 2017
Published : 11 Aug 2017, 00:55:34

IFC survey puts annual credit gap at Tk 60b

Women own only 2.8pc of SMEs in Bangladesh
FE Report

The annual credit gap in the women-owned small and medium enterprises (SMEs) segment is estimated at Tk 60 billion ($ 0.77 billion) in Bangladesh, says a survey conducted by the International Finance Corporation (IFC) on women SME finance market.

And such limited access to finance is one of the main factors that disproportionately affects women entrepreneurs and limits their ability to sustain and grow their business.

There are some 7.8 million small and medium enterprises in Bangladesh that employ 86 per cent of the total workforce and only 2.8 per cent of the SMEs in Bangladesh are owned by women.

Keeping these in view, the IFC, a member of the World Bank Group, and Bangladesh Bank (BB) have partnered to work on improving access to finance for women SME entrepreneurs of Bangladesh, said an IFC statement.

An agreement to this effect was signed on Wednesday at the BB headquarters in Dhaka.

BB deputy governor SK Sur Chowdhury and IFC Country Manager for Bangladesh, Bhutan and Nepal Wendy Werner were present at the deal signing ceremony.

The IFC statement said the project would create a new market for the financial sector by de-risking lending to women-owned SME segment and encouraging the development of innovative financing models.

 The project also aims to demonstrate the business case for investing in women-owned SMEs that can spur economic growth and job creation.

By economically empowering women entrepreneurs, it will ensure that they can create jobs, spur innovation, and spearhead social change in Bangladesh, said the statement.

Under the project, IFC will help Bangladesh Bank design a targeted credit guarantee scheme for women SME entrepreneurs.

The project will review and update the existing SME policy of Bangladesh Bank to allow an improved flow of financing to women-owned enterprises and the SME sector, it said.

A comprehensive capacity development programme will ensure that the central bank's SME department staff can formulate, monitor and evaluate supportive policies for the SME segment, according to the statement.

"This project is a milestone in the development of the country's SME sector. Women entrepreneurs have the capability to transform the Bangladeshi economy. Bangladesh Bank is a pioneer among developing nations' central banks in pursuing inclusive growth through supportive financial sector policies," the statement said quoting the BB deputy governor.

The statement also quoted Practice Manager, Finance and Markets Global Practice of the World Bank Group Niraj Verma as saying: "This initiative deepens our partnership with Bangladesh Bank and we have a shared gender finance agenda. Interventions under this project will create an enabling environment to scale up the financial sector's participation in women-owned SME sector."

Speaking on the occasion, Ms Wendy Werner said: "Increasing the income of women entrepreneurs can improve broad development outcomes as they reinvest their earnings in their families' education and welfare. IFC and the World Bank Group share Bangladesh Bank's vision of a society where the financial system is inclusive and meets the needs of all the country's citizens."

IFC and the Finance and Markets Global Practice of the World Bank Group earlier supported Bangladesh Bank's efforts to develop a range of services such as long-term finance, infrastructure finance, sustainability and risk management, financial integrity and digital financial services. The new partnership programme is funded by Global Affairs Canada, said the statement.

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