Photo : Messenger
The government and Bangladesh Bank (BB) are working to increase women's participation in the country's financial sector. However, women's participation in financial institutions is on the decline, despite an increase in their involvement in the banking system.
In the last three months of 2023, non-bank financial institutions (NBFIs) increased lending to women but decreased lending to women entrepreneurs. At the end of the year, the amount of loans provided to women entrepreneurs stood at Tk 2,225.97 crore, which is Tk 102 crore less than the previous quarter. This information is sourced from the latest report provided by Bangladesh Bank.
Analysing the data, it is evident that in the third quarter of 2023 from July to September, the amount of loans provided to women entrepreneurs was more than Tk 2,337 crore, which decreased from October to December. Although the number of women account holders increased during this time, women entrepreneurs are concerned as their loans have decreased.
However, when considering loans disbursed over the course of one year, women entrepreneurs received a greater amount. At the end of the December quarter of 2022, women were provided loans of Tk 2,045 crore, which decreased by Tk 220 crore over a year's period. However, while entrepreneurs' loans decreased, loans to women in the personal sector increased. At the end of the October quarter, the amount of loans disbursed to women was Tk 2,790 crore, which increased by Tk 78 crore to Tk 2,712 crore by the end of December.
During the mentioned period, although the number of women entrepreneurs' accounts increased, the number of women's personal accounts decreased. In the October quarter, the number of women's entrepreneurial accounts was 12,662, which increased by 578 to 13,240 by the end of December. On the other hand, the number of women's personal accounts decreased by 40 compared to the previous October quarter.
Meanwhile, although financial institutions increased lending to male entrepreneurs, the amount of loans in the personal sector for men decreased. At the end of December, they lent Tk 56,422 crore to entrepreneurs, which is Tk 532 crore more than the previous quarter. At the end of October, the amount of loans in the entrepreneurial sector was Tk 55,889 crore.
Additionally, loans to men in the personal sector increased. At the end of October, the amount of loans given to men was Tk 12,399 crore, which decreased by Tk 79 crore to Tk 12,320 crore by the end of December. In other words, the amount recovered in the last three months exceeded the loans provided to men during the same period.
Bangladesh Bank has set a target for disbursing loans to women entrepreneurs by 2024, but to meet that target, the loan amount will have to be increased by more than double within 9 months, which raises doubts about whether it is possible at all.
Women entrepreneurs say that when they go to banks, additional conditions are imposed on them. Banks are unwilling to provide small amounts, due to which they have to take loans from cooperatives at high-interest rates, increasing their business costs.
The organiSation registered with the Department of Women and Children Affairs works on the rights and financial opportunities of women entrepreneurs.
Hasina Begum, President of Jashore Street Mahila Udyog Samiti, still vividly recalls the challenges she faced securing financing when she started her business two decades ago. She said, “Two decades ago when I started the business, no one wanted to give loans. I did not get help from many banks and financial institutions either. Later, I took a high-interest loan from a cooperative to run the business.”
“After facing numerous financial deceptions, the business has reached its current state. That's why I am working through the Jashore Street Mahila Udyog Samiti to ensure that new entrepreneurs get investment facilities.”
Mohammed Amir Uddin, Director of the Financial Inclusion Department of Bangladesh Bank, told The Daily Messenger, “We have special instructions regarding lending to women. The institutions cite the lack of loan security as the main reason why women do not get loans. That's why we give special assurances to the lending institutions so that women can get loans. We anticipate an increase in lending rates to women in the near future. We are working on this issue.”
Nasima Akter Nisha, General Secretary of E-CAB and President of WE, told The Daily Messenger, “Non-banking financial institutions have their own rules which they follow. We have increased the allocation for women entrepreneurs in banking institutions. Now we are urging for relaxing the loan conditions. As long as the conditions are not relaxed for women entrepreneurs and they are not provided consultancy in these matters, it will not be possible to fully disburse the allocation in the banking sector.”
“Since the banking institutions are accountable to the Bangladesh Bank as the regulatory authority, their issue needs to be resolved first. It would be good if non-banking financial institutions come forward. Otherwise, there may be a need to amend this policy. However, there is no alternative to creating opportunities for women in these sectors,” she added.
Messenger/Disha
