Empowering Women Entrepreneurs Through Financial Literacy



| Updated:
July 21, 2022 9:04:28 p.m.


Over the past 20 years, Bangladesh has made remarkable progress in empowering women across the country. The country has set an exemplary record, ranking first in gender equality among South Asian countries for the seventh consecutive year, according to the World Economic Forum’s latest Gender Gap Index report. Much of this current progress is due to more women participating in the labor force and an increase in the number of women engaged in entrepreneurial ventures, among other factors.

Female entrepreneurship in Bangladesh has seen a steady increase in recent years. According to a 2019 Center for Research and Information (CRI) report, the number of independent women has increased dramatically, from 31% in 1996 to 39% in 2017. The Covid-19 pandemic has seen more women get started in digital entrepreneurship. , increasing the share of women-led businesses in the country’s startup ecosystem. A 2022 report by Meta indicates that more than 70% of women-led businesses have been created using Facebook in Bangladesh since the outbreak of the Covid-19 pandemic in March 2020.

Even amid all the positivity surrounding the progress made by women entrepreneurs in the country, the challenges and difficulties they face in doing business in Bangladesh often paint a rather bleak picture. In 2020, Bangladesh was among the 58 lowest-ranked economies in the Mastercard Index of Women Entrepreneurs. The index provides an analysis of the socio-economic factors that motivate or discourage women’s participation in business around the world. Of particular note is Bangladesh’s last position in the component, Knowledge Assets and Financial Access – showing a general lack of access to finance for women entrepreneurs and insufficient knowledge in seeking institutional support.

At the government level, Bangladesh has been very candid about the contribution of women entrepreneurs to the country’s economy. It recognizes the vital role women-led SMEs play in industrial growth and in the service sector. The government is committed to creating an enabling environment for women entrepreneurs, undertaking comprehensive policies and other initiatives such as expanded training opportunities and specialized financial services to accelerate their economic empowerment. In 2021, Bangladesh Bank, under its “Small Enterprise Refinancing Scheme”, lowered the interest rate on loans to women-led SMEs from 7% to 5%. It has also set a target of granting 15% of all SME loans to women entrepreneurs by 2024. In addition, a more lenient approach to the issuance of guarantees has been adopted, allowing financial institutions to grant loans to women entrepreneurs against personal and social interests. , and group guarantees as collateral.

Various private and non-governmental initiatives are also working to support women entrepreneurs and help them remove barriers to their access to finance. Recently, Anondomela, the United Nations Development Program (UNDP) online marketplace for entrepreneurs, held a 40-day workshop on basic digital and financial literacy with 3,000 participants from forty districts. The goal of the workshop is to empower women entrepreneurs to effectively operate and grow their online businesses. Initiatives like these empower rural and urban women through skills and capacity development.

It is important for women, especially female entrepreneurs, to acquire financial literacy. Financial literacy provides the knowledge and understanding needed to allocate day-to-day expenses, manage savings, pay off debt, fight financial insecurity, and make wise decisions. In short, financial literacy and female empowerment go hand in hand. Acquiring financial knowledge will enable these women to better understand their finances in order to run their business smoothly. At the same time, women must be trained in order to improve and develop their managerial and operational capacities.

Therefore, organizations, both public and private, must come forward and come together to empower these women entrepreneurs. At the same time, banks, as part of their corporate social responsibility (CSR) activities, should provide them with the knowledge and skills to improve their financial literacy and solvency. A set of unique initiatives and programs should be put in place to make it easier for women entrepreneurs to access the credit needed to run their businesses hassle-free. Together they can introduce credit guarantee schemes, organize training programs for existing SMEs and help them build better networks.

The private sector and the public sector can also organize capacity building training to help develop the skills of women entrepreneurs, help them educate themselves through trainings and workshops, and build their capacity. The training will help them acquire the necessary knowledge and business acumen while adding a new dimension to their business. Given this scenario and to address the challenges discussed above, Eastern Bank Ltd. and the Prerona Foundation have jointly launched a training program called “Joyee – Women Entrepreneur Development Program”. The six-month training program aims to provide in-depth training to growth-stage women entrepreneurs on financial literacy and business management. While this initiative is a welcome initiative, more such initiatives by the private and development sectors are needed to create an enabling environment where women entrepreneurs can thrive.

Women-led SMEs need appropriate support to access loans and credits to broaden the horizons of their entrepreneurial potential. As a country, we must continue to make persistent efforts to provide opportunities for women to develop their entrepreneurial role in society. We are on the right track and the right initiatives from the public, private and development sectors will only accelerate the growth of women entrepreneurs.

Dr. Melita Mehjabeen is an Associate Professor at the Institute of Business Administration (IBA), University of Dhaka. She can be reached at [email protected]

Sarah J. Greer