Entrepreneurs Women in Bangladesh

Abstract

Entrepreneurship has been considered as one of the important determinants of industrial growth both in the developed and in the developing countries. Development of women entrepreneurs in a country is pivotal when there is almost half of the population is female. Without the active involvement of women in financial activity no country can ensure a sound economical and industrial growth and development. The article focuses on identifying problems faced by women entrepreneurs in Bangladesh and identifying more rising and potential sectors for women entrepreneurs in Bangladesh than the current sectors which are already chosen by the women entrepreneurs. This study will also analyze the last ten year’s contribution of SME Foundation and its result in the financial improvement of women entrepreneurship development in Bangladesh. Women involved in various micros, small and medium enterprises are facing severe challenges to work in a male-dominated society, competitive and complex economic and business environment with the increasing government policy supports and contribution of financial institutions.

Though few of them has improved their living conditions and earned more respect in the family and the society through active engagement in business. The success rate of women entrepreneurs is still low than the success rate of men. One more plan to study which I want to include in this synopsis is to find out potential fields but still untouched to involve increasing number of educated female workforce who are trying to survive in the severe competition of job market with low payment and less freedom of choice. After completing education female with technological and creativity and problem solving skills, can set up and run a suitable business which will solve their financial demands and give a social recognition. The article also identified major challenges in upcoming years that may hinder the smooth development of women entrepreneurs in Bangladesh. However, the challenges that were identified includes lack of easy access to micro-credit, complexity in the refinancing schemes, regulatory framework challenges, lack of diversified trainings in more potential sectors, limited access to market information, underdeveloped infrastructure and utility services.

Introduction

The number of educated women is increasing after the successful implementation of eradicating illiteracy program by the government in Bangladesh for the last 20 years. However this huge number of educated women is not fully engaged in economic activities due to lack of enough employment opportunities and other social factors in Bangladesh. Educated women are feeling uncomfortable to do business with low social status, less recognition with low profitability in business. Women are now a day’s engaging in economic activity with almost similar products and services in few sectors like in clothing, food, beautification through the activity of sewing, designing boutiques, nursery, gardening, frozen foods supplying, and opening parlor.

According to the Prime Minister of Bangladesh, women contribution to the GDP growth is 34% which is the result of increasing women’s participation in our economy. Over four million women are employed in the readymade garment industry. Government has the aim to ensure 40 percent participation of women in every sector by 2021 and 50 percent by 2030. To ensure at least 40 % women participation in every sectors in economy, entrepreneurs should start business in those sectors which are still untouchable by female entrepreneurs but potential if they can utilize their skills, knowledge, unique business ideas. From a statistics of 2010-2011, the contribution of agriculture in the economy of Bangladesh is 20.01% whereas the contribution of industry and service sector is 30.38% and 49.61% respectively. (Mohammad Khalekuzzan, 2013-14). At present, Bangladesh economic development largely depends on industrial production and service oriented business where male entrepreneurs are become the successful businessman both in small and medium business and very few in large business. After the liberation 1971, women started to involve in financial activity by engaging in job market to take family burden and to earn social status. To meet the financial demand women started to get self-employed through their limited capital and capabilities from 1980s. Along with government patronization like SME Foundation, many NGOs like Asha, Brac, Proshika are contributing in the financial development of women in paramount figure.

Women are no longer treated as only job seekers; they become the job creators in the economy of Bangladesh by offering employment opportunities for the deprived and unemployed people in the urban and rural areas to flourish their business activities. Bangladesh Bank issues policy guidelines for commercial and scheduled banks to give priority to women while disbursing Small and Medium Enterprise (SME) credit with very low interest rate. Meanwhile, good number of NGO-MFIs offers microfinance services to the women involving actively in micro, small and medium enterprises. The effectiveness of those financial support and assistance on women entrepreneurship need to be analysed as the women entrepreneurs to growth and skill development confine themselves in one or two sectors in the economy only. The causes of not engaging diversifying business and low profitability in present business need to indentify.

Review of Literature

A number of articles and researches on women entrepreneurship in Bangladesh have been done in Bangladesh and in various countries as well. An entrepreneur is a person who possesses the entrepreneurial qualities, bears the risk provides capital and uses them in setting up business. They generate innovative business ideas, take new business opportunities, make investment by themselves or borrow, take risk and enjoy profit as a reward of their endeavor and expand the business. Panda, S. (2017) identifies that woman entrepreneurs have to struggle with managing capital, marketing, using technology and finding corporations/agencies to outsource their non-core business activities. She thinks initiatives and subsidies should be introduced by policy makers to invest in “special economic zones” which can also boost women entrepreneurship in developing countries. Workshops on business management, negotiation and marketing can train women to better manage their business.

According to a Business Initiative Leading Development (BUILD) study report, women entrepreneurs constitute about 10% of the total business entrepreneurs in Bangladesh whereas women in advanced market economies own more than 25% of all business. Ahammad, I. and Moudud-Ul- Huq, S. in 2013 shows in their research finding is that after the liberation women entrepreneurship started to increase from 1996 and was highest in between 2000 to 2005. After 2005 it declined due to various problems relating to women entrepreneurship. A survey conducted on 50 women entrepreneurs discloses that majority of them 72 percent are engaged in handicrafts, next 9 percent on garment and 8 percent on parlor business. Remaining 3% on food, 3% on agro-based, 1% on printing, 2% on information technology (ICT) and remaining 2% involved in other sectors. Lovely Parvin (2012) in China conducted a research where they identified the areas where the women entrepreneurs in Bangladesh is currently engaged in economic activity , categorized the sectors which are micro, Small and Medium Enterprises of Bangladesh, a heterogeneous group of agricultural and industrial subsectors, MSME includes crops, fisheries, livestock and poultry, rural non-farm, agro processing farms, handlooms and handicrafts, wood and steel furniture, cartwheels, footwear, plastic products, textile dyeing and block printing (manual), computer software and information technology, silk weaving, small grocery stores, etc. This sub-sector is facing acute problem of finance towards smooth growth.

According to Ramadani, V., Hisrich, R. and Rashiti, S. (2015) the vast majority of Ukrainian female entrepreneurs had post-secondary education; 35% finished technical training/college; 41% completed bachelor’s degrees and 18% completed graduate studies. Tatyana Ivanovna started her own business in Dnipro: with hard work and EU support, she is now running a successful pasta factory. EU4Business support has helped Tatyana Ivanovna expand her business and she is now selling to supermarkets and humanitarian associations. In addition, Refinancing scheme is available for women at an interest rate of ten percent in line with the guidelines of the Bangladesh Bank. Although, the absolute number of women entrepreneurs covered under the scheme is low, some 19,194 women entrepreneurs had received SME credit by the end of 2010. Total amount of loan disbursed to women entrepreneurs also increased from Tk. 354 millions in December 2009 to Tk 2,10.3 billion (BIDS, 2010; Priyodesk, 2011). Technological up gradation in many sectors has taken away more jobs from women than from men. the largest sector for female employment is the RMG factories where female participation was almost 80 percent of all RMG workers. Unfortunately, female participation in this sector has now decelerated to about 61 percent, thanks to the automation in the sector, according to a recent Centre for Policy Dialogue (CPD) survey.

Objective of the Study

My research objective is to identify more prospective, rising sectors for women entrepreneurs in Bangladesh and assume all major challenges from those prospective sectors to determine possible solution to face those challenges.

Specific Objective of the Study

The specific objectives of the study are to:

1. Identify promising sectors for educated women entrepreneurs to increase the national GDP and the prospects for change the role from job seeker to job creator for Bangladesh.
2. Show an overview of present state of women entrepreneurs and make some recommendations to overcome the situation of low profitability, cheap rate of labor value and fierce competition.
3. Compare the current challenges faced by the women entrepreneurs in Bangladesh with the challenges faced by the women entrepreneurs in South Asia with a view to find out profitability and success rate for women entrepreneurs across the globe.

Research Question

This study aims to review the position of women entrepreneurs in Bangladesh and identify potentialities and shortcomings. The main aims of study are:

1. Provide a recent overview of the women entrepreneurs in Bangladesh.
2. Examine the current financial condition of women entrepreneurs in SME.
3. Examine the profitability and success rate of women entrepreneurs in Bangladesh compared to the women entrepreneurs in neighboring countries.
4. Examine the participation of educated unemployed women in business
5. Examine the contribution of women entrepreneurs in the national economy of Bangladesh.
6. Examine the potentialities and challenges of women entrepreneurs in Bangladesh.
7. To recommend and suggest preparing measures to promote effective utilization of skills of women entrepreneurs in business.

Justification of the Study

I have been working as a woman entrepreneur since 2010 in clothing business, opened up fashion house in 2013 with own designing capabilities and other utilities in Sylhet. I participated in some trade fair, exhibition with other women entrepreneurs from different areas in Bangladesh. According to my experience and observation of women entrepreneurship development in Bangladesh from last 10 years, I feel an urgency and necessity to conduct a research on the actual profitability and success rate of women entrepreneurs in the current sectors they are running their business in Bangladesh and identify the problems and prospective areas for the women in Bangladesh which will give women more recognition in the international business and uphold their financial condition. This study will also address the upcoming challenges in near future for the development of women entrepreneurship in Bangladesh.

1. A deep analysis and an evaluation of current success and actual achievements of women entrepreneurs in Bangladesh need to be conducted.
2. In the era of advancement of science and technology, business nature and environment are continuously changing with newer opportunities. Looking for new potential areas is crucial for the concern entrepreneurs where women can be able to get maximum return minimizing their risk. For that reason, new prospective areas and new challenges should be identified as early as possible.
3. Comprehensive data and more research is needed to be presented to trigger women entrepreneurs to enter prospective sectors in the economy.
4. Staying in less potential and unprofitable business cannot be a sign of good entrepreneur. Women entrepreneurs may require bringing diversification and expansion in their business activity for maximizing business return. Comprehensive research and available information on current sectors held by the women are highly demanded for many women development program and women entrepreneurs.
5. A thorough study is essential to attract investors across the world to invest on those potential sectors is rising where educated women entrepreneurs in Bangladesh can engage their efficiency, creativity, skills in more productive way than the sectors they are currently working.

Methodology

A descriptive research will be conducted to fulfill the main purpose of this research. Both qualitative and quantitative method will be followed in this research according to the requirement. A major portion of data will be based on secondary source of data and few portions of data will be collected from primarily through questionnaire to the women entrepreneurs in Bangladesh both in rural and urban areas. A questionnaire will be prepared consisting of a number of questions regarding the purpose of the study. Questionnaire will be included economic problem (problem in getting money to start-up a business, inadequate capital), business challenges (competition, profitability rate, shortcomings of presents credit and loan schemes ), other problems (availability of adequate training program, insufficient technical knowledge, lack of managerial and entrepreneurship skills and experience), financial problem (high rate of interest, lack of start-up finance) faced by women entrepreneurs. Another portion of data will be collected for this research conducting a survey on the educational sector with the two small groups of female students, one is attending higher secondary level education at college and other group is attending higher education at university to find out the interest, skills and knowledge level.

Prospects and Urgency of Involvement of Educated Female Workforce in Entrepreneurship

Literacy rate of female is smoothly going up in Bangladesh which is 70.09% in 2017. Educated women require less basic training and development than the uneducated women as they are more promising and skilled portion of the population. Developing country like Bangladesh with blooming female workforce can easily utilize them by engaging them aged from 20 to 35 in producing diversified, sophisticated products in various sectors. Now a day’s many legendary women has started supplying those products which have high international demand through exhibition in abroad. Those women are representing Bangladesh participating in many international trades’ fairs. To make balance between the crucial role of motherhood and financial role, right kind of business selection is important. Some sectors are still promising for the energetic, creative women to be entrepreneurs which can relax a woman to conduct business staying at home and rearing child and maintaining other duties in some extent. As there almost half of the women spend time at home after receiving education and marriage, if they utilize their daily leisure time in constructive ideas, our national GDP will be almost double than present. In additionally, every mother has a unique recognition to her child and want to ensure a standard living of her child. Now a day’s both male and female parents are thinking of taking financial burden of family together in developing countries which drive women toengage in economic activity.

Contribution of SME in Developing Women Entrepreneurs by Providing Loan

Financial constraint is not only of Bangladesh but of entire developing countries. All women’s admitted that arrangement of finances is a critical issue for them, as they get rare support for this from their husbands. Due to lack of finance most of the ideas of women entrepreneurs could not be materialized. Few problems they face are loans without collateral, interest free loan, more interest in long term loans, no interest free investment for women entrepreneurs, no relaxation in Vat. At present, government’s micro-finance schemes and small and medium enterprises (SMEs) have been contributing to poverty reduction and women empowerment. At least 10 percent of all credit is allocated to women-led SMEs. The number of beneficiary enterprises has significantly increased since 2009-10, especially during 2011-12 and 2012-13. In 2009, total amount of credit disbursed to the SME sector was BDT 12.45 billion, which increased to BDT 28.89 billion in 2013, registering an annual average growth of about 33 percent. Noticeably, Bangladesh government along with non-government organizations has taken several initiatives to encourage women getting involved in various micros, small and medium enterprises. Different types of organizations provide either direct or indirect supports to women entrepreneurs besides the government. Among various supporting organizations, the financial institutions are considered most important. A list of supporting organizations is given subsequently but only government policy supports and financial institution’s supports are illustrated broadly. According to BIDS report, the SME service center has increased by 179 in December, 2009 from 148 in June, 2009 (BIDS, 2010). While the number of service centers has risen, it is still not adequate. The banks/FIs need to expand active SME wings in each bank especially in remote and potential locations to cater to the credit needs of the SMEs.

Prospects of the Women Entrepreneurship in Bangladesh

Bangladesh is emerging with educated and skilled human resources. Half of them are educated women having honors and master degree in education. Most of them seeks job in government and private sectors which creates frustration when they cannot survive in the highly competitive employment environment. There will be very few or barely any people those who have no ambition to do nonfinancial activity after receiving education. Rather mentality to engage youth life in a productive source to earn money and get social recognition drives youth women specially to employ themselves in many financial activities, creating employment.

1. Educational resources manufacturing: Educational learning material making, homeschooling resources producing like Mathematical educational toys help for sensory aids made of woods. Montessori kids wooden toys which are intellectual and educational toys like jigsaw puzzle paper toys, cylinder blocks, educational craft from recycled products. Puppet making, Handmade quiet activity books made of cloth is a rising sectors which can be exported to many developed countries.
2. Pre-school and Creative Day Care business : ECD (Early Child Development), Setting up own day care centre
3. Designing: Interior designing and graphics designing
4. Publishing: Story books own written, infant learning books, animated Coloring books
5. Growing and selling indoor and outdoor plants: Indoor and outdoor decorative plants , office plants , creatively designed bonsai have high demand in our country now-a-days along with the high demand in abroad countries. Planting and selling those different decorative plants and seeds which can be potential sectors for women who wants to do marketing in online staying at home.
6.  Jewellery and ornaments making: Raw materials, resources are very available in everywhere in this modern era. Women can export good quality jewellery and ornaments in their house with special skill of making ornaments
7. Event Management: Arranging trade fair, exhibition on creative ideas, family program management like marriage occasion through from planning, managing, providing resources related to interior and exterior designing to photography are also flourishing sector in cities. Skilled women can enter into this type of business engaging other women.
8. Ready food business: Women can utilize their creative cooking skill for business purpose that business requires less involvement in outside. Many women are being self-employed in by preparing ready, frozen food to departmental shops, restaurant now a days. This business give women more relax in taking responsibility of family maintaining and raring children. There is a opportunity to send those frozen readymade food to neighboring country if women engage more skilled people and proper business plan.
9. Hotel and Motel business: totally untouched by the influential women. Influential women can be able to do well in this sector with their creative cooking skill, along with excellent management skills.

Challenges for the Women Entrepreneurship in Bangladesh

Though Bangladesh is rich in natural and human resources, scopes and opportunities for women entrepreneurs, there are still many challenges ahead. Lack of good entrepreneurial skills, lack of technological, managerial skills, gender discrimination, lack of diversified trainings in more potential sector, worried about societal acceptance, less awareness of own financial development, limited access to market information, underdeveloped infrastructure and utility services were identified as major challenges that women entrepreneurs faced at starting small business.

Lack of Startup Finance

Women entrepreneurs are severely facing problem in getting money to start up a business initially. Though many government policies and supports are introduced with different financial schemes which are not available to the desired group due to lack of knowledge, market access.

Lack of Entrepreneurial and Managerial Skills

Personal attributes, freedom of work and desire for higher social status drive women to engage in own business activity, the success of this entrepreneurship largely depend on the skills they possess. Entrepreneurial knowledge and good managerial skills are very important to be inbuilt in women entrepreneurs through continuous training and development program so that they can operate business successfully.

Lack of Technological Skill

In the era of continuous technological development, good technological skills are required in all sectors. Few rising entrepreneurs are maximizing benefit in business with this skills, the rest are still lagg behind due to less awareness and unavailability of training in technological sectors.

Low Cost Strategy With Poor Quality Production

To survive in the severe competition in same market segments, women entrepreneurs follow very low cost strategy for higher sale and attracting customers in some cases in clothing sectors. This tendency will lose international market for the products made by women entrepreneurs. High quality materials with high standard packaging and other facilities women entrepreneurs can able to enter into international market and earn international recognition.

Lack of Diversified Trainings in More Potential Sector

Rural women are facilitated with trainings in few sectors like sewing, designing, nursery etc which is not enough to reduce the gap between men and women to contribute in various sectors in the economy. Lack of adequate training support in developing different personal skills, technological skills, training on other necessary business skills on different field are also major challenges in Bangladesh.

Limited Access to Market Information

Most of the women in Bangladesh is not aware of the regulatory issues like trade licence, taxes and VAT. They don’t have basic knowledge of maintaining books of accounts and other documents due to which women especially rural women which impair the development women entrepreneurs.

Underdeveloped Infrastructure and Utility Services

Infrastructure facility is miserable in most rural areas of Bangladesh. Lack of infrastructural facilities such as transportation, communication and supply of electricity in rural areas is a barrier for successful running of entrepreneurial business development in the rural area and even sub-urban areas. For this reason many rural women can barely continue a business in industrial sectors due to lack of facilities. They can hardly maintain the standard quality in production thereby which is necessary to survive in the competition.

Lack of Enough Market Information

Lack of knowledge of using market promotion activities creates difficulties to sustain in the competitive markets. Women in most areas are not used to observe domestic, as well as export market information.

Conclusion

This research paper will be an effective road map for the policy maker so that they can improve the environment of business for female entrepreneurs and ensure a sustainable growth of women entrepreneurs with high profitability and success rate in Bangladesh. Due to unavailability of information, abundant research and accurate data on women entrepreneurship in Bangladesh, this research is very timely decision to get those information. Researchers can use these insights to take an in-depth view of policy initiatives and offer recommendations for a better impact. It is worth to note that despite many barriers, a new women’s entrepreneur class has risen in the country taking the newer challenges to work in a male-dominated, competitive and complex economic and business environment.