The writer is the CEO of BUILD, a partnership organization of DCCI, MCCI and CCCI. She can be reached at ceo_build@outlook.com
We are going to celebrate 8th March as the International Women’s Day every year. The theme for 2017 is “Be Bold for Change”. Though over a hundred years have passed since the declaration of Women’s Day and 45 years have passed since the independence of Bangladesh, the condition of women in Bangladesh leaves much room for improvement. The economic status of women is now accepted as an indicator of the stage of development in a country. As such, women entrepreneurs in Bangladesh are coming up with different ventures but are facing several problems, particularly in the field of access to finances, proper technology and infrastructure. Happily, the government has announced a number of policies/incentives for them, but the implementation of the same has been slow and almost unnoticeable. It is now time for defining how to increase access to technology for women entrepreneurs as a cross-cutting factor to make them more competitive while letting them avail finances so they can afford both hard and soft infrastructures.
Recently the government agreed to provide a separate EZ for women in Chittagong; this would be a milestone in the history of Bangladesh if it can be implemented properly.
Women entrepreneurs constitute less than 10% of the total business entrepreneurs in Bangladesh whereas women in advanced market economies account for more than 25% of all businesses. The Bangladesh Economic Association (BEA) estimated that women’s paid and unpaid work contributes between 20%-48% of the GDP, but there is no official statistics to recognize the contribution. While we analyze the types of women entrepreneurship, it is seen that a significant portion of such entrepreneurs is engaged in manufacturing (54%), remaining are in retailing, wholesaling and in service sectors. Since Bangladesh has opted for a manufacturing-based economy in the 7th Five Year Plan, the focus on the development of women entrepreneurship to create decent and quality employment and expand manufacturing base is very important.
Access to technology for increasing the scale of production and improving the quality of production of woman entrepreneurs was not included on the policy agenda, so far. For export-oriented industries, capital machinery import is exempted, but most of the women entrepreneurs are producing at the domestic level and cannot raise their voice in the field of the technology ecosystem. They are afraid of the use of ICT and not aware fully the benefits of its use.
In accordance with the Vision 2021, it is very important to ensure women participation in the technological activities in order to accommodate then in different areas. The 7th FYP will encapsulate a strategy for inclusive growth which empowers people by creating employment opportunities, fostering the scope for greater labor force participation, particularly of women.
Women entrepreneurs are mostly not engaged in export-oriented businesses as they lack the technical knowledge and access to high-tech machinery.
A Bangladesh Bank Survey shows that the majority (77.4%) of the total women enterprises used manual equipment for their production whereas 13.8% used solely mechanical equipment and the rest of the enterprises (8.8%) used both manual and mechanical equipment. The 7th FYP reported that only 15% mobile banking users are female, while according to data from e-Desk on Information Technology (IT) professionals, as of the fourth quarter of 2012, only 1,200 of 30,000 or 4% registered users were female. Only 15% of the total women enterprises were found to use information technologies for their business, while 13% of the workforce in the IT sector is comprised of women, most of them in junior or mid-level management positions, and only 1% of the ICT companies in the country are led by women. In Skill Enhancement Program which is under Support to Development of Kaliakoir Hi-tech Park Project, 2,162 people have already been trained and among them 26% are women. Under the Freelancer to Entrepreneur Development Program, 2,512 people have been trained among them 2,305 participants were male and only 217 participants were female.
In the above circumstance, it is seen that access to technology for women entrepreneurs in Bangladesh is not at all up to the mark but it is an absolute need they cannot escape from. Technology can benefit women in many ways. This includes the use of e-fax machines, electronic mail, mobile phones, video conferencing, instant text messaging applications, social networking applications etc. All these modern communication technology tools have simplified the way of businesses communication. The introduction of technology into their business can improve the quality of production, skill, and scope of work. They also are not capable of advocating in favor of their need and thus need a platform. Concern organizations such as Ministry of Industries, SME Foundation, Bangladesh Small & Cottage Industries Corporation (BSCIC) and other related organizations can come forward in this respect.
There are some policies and projects such as Women Development Policy 2011, National Industrial Policy 2016, National Information and Communications Technology (ICT) Policy 2015, Gender Budget, Kaliakoir Hi-Tech Park, Software Technology Park (STP), Small and Medium Enterprise (SME) Credit Policies & Programmes by Bangladesh Bank, Public Procurement Rule etc. In all these policies there is a long wishlist to improve the status of women entrepreneurs but these issues need proper implementation from there end. Also, women need to become more aware of these policies and concerned women associations can play a part in this regard.
Women entrepreneurs are mostly not engaged in export-oriented businesses as they lack the technical knowledge and access to high-tech machinery. Thus, they mostly use manual, obsolete and old equipment for their production so the product quality is not great and they cannot increase the scale of production. In the public procurement rules, there is a mention of sub-contracting. However, this could be amended to mention the prioritization of a women-led organization in this sub-contracting so that they can come up gradually.
Many women are not aware of our industrial infrastructure so that the conventional system of industrialization is unfamiliar to them. For these reasons there is the need for a separate Economic Zone (EZ) is essential for women entrepreneurs. Recently the government agreed to provide a separate EZ for women in Chittagong; this would be a milestone in the history of Bangladesh if it can be implemented properly. In this EZ, adequate financial and technological support, power and gas supply, approach roads, transportation facilities, security etc. need to be ensured. All business opportunities for women and value chain entities should be present in the economic zone. Successful economic zone management approaches incorporate women economic empowerment along three dimensions – fair employment and working conditions for female employees, equal access to opportunities for professional advancement, and investment opportunities for female entrepreneurs.
So far it is seen, Banks are usually reluctant to finance small entrepreneurs and especially women entrepreneurs, as they believe that supervisory costs for small entrepreneurs is much higher than larger businesses. Micro and Cottage entrepreneurs are dependent on the Micro-Finance Institutions (MFI) for funding, for which the cost of loan is high. However, it is true that MFI borrowers are sincere and they repay the loans on time. From the census in 2013, it has been observed that about 98.50% of the enterprises of the country are from small, micro and cottage enterprises and they have created about 22.5 million jobs out of the 24 million jobs created by the 7.8 million enterprises of the country. Boosting this sector and ensuring the quality of jobs would lead to greater employment in the country.
For credit delivery supervision, banks and financial institutions can make the best use of technologies to reduce cost and for that reason, women entrepreneurs should be trained. Now mobile technology has become so popular because of its easy use. Financial inclusion is one of the primary agendas of the government and a Financial Inclusion Strategy is being prepared.
Only 15% of the total women enterprises were found to use information technologies for their business, while 13% of the workforce in the IT sector is comprised of women, most of them in junior or mid-level management positions, and only 1% of the ICT companies in the country are led by women.
It has been difficult for women to receive policy benefits. A Bangladesh Bank circular indicated that personal guarantees can be provided for loans up to Tk 1.5 million for women entrepreneurs which was raised to Tk 2.5 million in 2009. Banks usually need 2 (two) personal guarantees. The guarantor could be a spouse, parent, sibling or another family member. In the case of women, banks prefer husbands to be one of the guarantors. Some banks also need a third party guarantor other than family members. Business women usually face problems in case of providing a guarantor and have to depend on persons other than family members. In that respect, banks should maintain Bangladesh Bank guidelines and should not request for additional guarantors. Bangladesh Bank should make it clear that guarantor should not be restricted to husbands only. Bangladesh Bank could provide a directive to all banks so that their practices are gender neutral and extra requirements are not imposed while women entrepreneurs want to get loans.
Women entrepreneurs face stringent conditionality for getting financing from banks and financial institutions. They usually opt for unofficial easy lending sources and faces serious obstacles to get out of those financial traps. Domestic Factoring is allowed but not popular. A domestic factoring guideline/policy could be framed to make it simple for them to get the benefits of factoring. Banks could be more sincere regarding Trade Financing especially for these entrepreneurs as they are sincere in returning their loan installments.
Financing facilities are mostly available in the service and trading sectors. A survey of SMEs shows they have to visit on an average 15 times for one bank loan, while it was 3 visits for loans from an informal money lender and 2.25 visits for loans from relatives and friends (Choudhury and Raihan, 2000). Women often prefer to take loans from friends and relatives due to the complex loan procedures. Refinancing schemes are becoming unpopular because of stringent and complex procedures.
Information desks of different banks and financial institutions are not updated with information on incentives available for women entrepreneurs. For loan amounts exceeding Tk 8 lac, registered mortgage or cash collateral is also required for a loan. There is usually a processing fee of 1% for all loans. Documentation requirements for women entrepreneurs in this respect is also difficult.
In the Women Development Policy 2011 in para 29.3 there is a mention that in order to facilitate the interest of the women, necessary laws, rules, and regulation would be enacted to extend technology support for the women. However, there is a limited investment for women’s greater access to technology in the manufacturing sector. Small and Medium Enterprise (SME) Credit Policies & Programmes of Bangladesh Bank, should have a special mention about the need for technology support for small-scale entrepreneurs. Women have achieved good prospects in the small and cottage and micro-home-based business. Their present involvement in manufacturing and involvement in construction activities is likely to continue. Women have emerged in several promising areas for enhanced female participation and employment. They now need to raise their collective voice for increasing technology access for maintaining their growing involvement in manufacturing and investment sectors.
The Fourth Industrial Revolution (4IR) is building on the Third and it will be ICT based revolution. It is characterized by a fusion of technologies that is clouding the lines between the physical, digital, and biological spheres. Activities of 4IR are spread into different areas which are linked with climate change, sustainability, resilience, product recycles, industry value chain and so on. Women entrepreneurs are far behind in assimilating themselves with this neo-industrialization pattern. It is the policy makers who need to come forward to support them to sustain the changed environment.
