Women Entrepreneurship in Case of Bangladesh

Introductory

Women entrepreneurship is a rapidly growing phenomenon in many developing countries including Bangladesh. This paper reviewed the literature on women entrepreneurship development in Bangladesh with specific focus on government and financial intermediaries supports. The report also identified major challenges that obstruct smooth development of women entrepreneurs.

Women involved in various micro, small and medium enterprises take on the challenge to work in a male-dominated society, competitive and complex economic and business environment with the government policy supports and financial institutions participation. They improved their living conditions and earned more respect in the family and the society. However, the challenges that were identified includes lack of access to credit, limited access to market information, infrastructure and utility services, traditional technology, bureaucratic complexity and so on.

This report provides some useful academic insight and offers some practical suggestions toward improving government policy supports for developing women entrepreneurs. Key words: women entrepreneurs , entrepreneurship , challenges , prospects , government policy support , financial intermediaries.

Women entrepreneurs constitute less than 10% of the total business entrepreneurs in Bangladesh whereas women in advanced market economies own more than 25% of all businesses. It is heartening to note that despite many barriers, a new women’s entrepreneur class has arisen in the country taking on the challenge to work in a male-dominated, competitive and complex economic and business environment. Not only have their entrepreneurship improved their living conditions and earned more respect in the family and the society, but they are also contributing to business and export growth, supplies, employment generation, productivity and skills development of the country. A recent United Nations report concluded that economic development is closely related to the advancement of women.

In countries where women have advanced, the economy has usually been steady. By contrast, in countries where women have been restricted, the economy has been stagnant. “Women’s entrepreneurship is not an easy task. “Becoming an entrepreneur is an evolution of encountering, assessing, and reacting to a series of experiences, situations, and events produced by political, economic, social and cultural changes. ” Given the complexities in the social environment and administrative structure, women’s entrepreneurship in Bangladesh is more challenging.

Many social and operational constraints continue to restrict women from starting and running economic enterprises. Apart from the family and social barriers against the mobility of women, the operational barriers such as lack of access to capital, lack of training facilities for skills development, lack of business services, lack of business data, complex banking procedures and collateral requirements, etc. continue to critically limit their progress. Over the past two decades, norms segregating and protecting women have been breaking down.

However, it is also apparent that female economic participation has in fact, marginalized women mainly because the activities involved in many areas does not provide women complete control over production, in land ownership or in income earned. In regular cases, the initiatives in this regard have transferred women from the core production activities to marginal ones, such as handicraft, handloom, or home-based industries than the more sophisticated productions involving modern technology, which are usually controlled by the male entrepreneurs.

Women are not being able to play a controlling role in the mainstream production where the male power has remained intact. No dent is easily created in patriarchy and the patriarchal value system of the society where women have been forced to enter and is involved marginally, being pushed increasingly into problematic situations. Their work load has increased manifold as they have to do both the domestic work and the income earning ones also.

The changing role of women shows that over the last two decades, there has been a steady upward trend in the participation of women in economic activities in developing countries as Bangladesh

The overall objective of the study is to examine issues involved in women entrepreneurship development with a view to addressing the problems of exclusion of women from access to market, technology and finance and make recommendations for the for upliftment of women ntrepreneur includes the following specifically:

• To identify the present status of women entrepreneurs in different sectors and the role of women entrepreneurs in the national economy,
• To determine the women entrepreneurs profile, their success indicators
• To examine and assess the socio-cultural/educational and legal barriers to women’s entry into enterprise, as well as performance and growth in entrepreneurship
• To examine how women’s business associations can strengthen women’s position in business international trade promotions;
• To indicate areas in need of further research with understanding of economic contributions byfemale enterprise owners;
• To provide strategic directions on how to promote and strengthen potentiality of womenentrepreneurs in Bangladesh.

This study is descriptive as well as suggestive in nature. Information for this study mainly includes secondary resources, consisting of books, newspapers, periodical articles from national and international level. Internet sources have mostly been used for research. An attempt has also been made to include the latest information whenever available. A few primary data were collected through interview and discussions with some successful women entrepreneurs.

The report also presents simple case study of few women entrepreneurs. The findings of the study are written in a more qualitative manner rather than in quantitative terms.

We have tried to focus more on present situation & support services given to the women entrepreneurs in our country. Besides the lack information there were some limitations also. The major limitations were finding proper information which is current and others also. Time limitations create some barrier in collection of qualitative data. Most of the survey conducted in this context is based on small or targeted samples. So accurate information could not found. So we make an overall study on women entrepreneurs and entrepreneurship related within Bangladesh.

Theoretical analysis Concept of women entrepreneurship

Meaning of women entrepreneurship

1. Based on participation ‘A women entrepreneur defines as an enterprise owned and controlled by one or more women having a minimum financial holding of 51% or more, giving 51% or more employment to women. ’
2. General concept “A woman or a group of women who initiate ,organize and run a business”
3. Based on innovation : “Women who innovate , imitate or adopt a business activity are called women entrepreneurs”
4. Some Facts: Women constitute not only half of the World’s population but also sway the growth of the remaining half.

• They produce half of the world’s food supply
• They account for 60% of the work force
• Own less than 1% of the real estate

Background/History

It is said that entrepreneurs are persons who bring about phenomenal economic changes, through their risk taking innovativeness and constant agility. Bangladeshi women entrepreneurs need to have an extra quality in the form of dogged determination and resilience since this is greatly needed to fight with adverse situations which seem to confront female entrepreneurs rather than their male counterparts in the present-day context.

Women in business in Bangladesh require more efforts than men to gain a foothold as economic change agents. Sustained efforts are needed to enhance the capability of women entrepreneurs as well as to create conditions for entrepreneurship to succeed in terms of setting up and maintaining productive operations. Many organizations have assisted in the formation of women entrepreneurs. WEDP of BSCIC underits project (1997-2002) has identified 90,661 women entrepreneurs, developed 73,169, disbursed BDT 5,711. 40 lac to 73,169 women and provided skill development training to 4,302 and management training to 32,995 women entrepreneurs 2. 8 Literature Review

Existing sex ratio in demographic structure of Bangladesh indicates that women comprise almost 50% of the total population. They are essential part of nation’s human resources. Due to this demographic structure, the issue of the participation of women in the mainstream economy is imperative. Without a meaningful and active participation of women, half of the total population, in regular economic activities, a dynamic and sustainable economy is impossible. A sustainable economy is a precondition for national growth and prosperity including institutionalization of a democratic system. It is also impossible to achieve the target of a poverty-free society without incorporation of women in the mainstream economy.

Considering the issue, a special emphasis has been given by the Government, donor agencies, NGOs, business community and all other relevant stakeholders through different interventions to ensure increased women’s participation in formal economic sector, especially in business and industry. Bangladesh is one of the countries, which rectified the UN Convention on the Elimination of all Forms of Discrimination against Women (CEDAW). The Constitution of Bangladesh also grants equal rights to women and men in all spheres of public life [Article 28(1), and 28(3)]. The Constitution also keeps an obligation for the state to ensure women’s active and meaningful participation in all spheres of public life (Article-10).

In response to the international concern and constitutional commitment, the Government of Bangladesh has initiated some institutional measures for the enhancement of women’s economic position and status in society. The major initiatives undertaken by the Government so far included establishment of a separate ministry on women’s affairs, formulation of the National Policy for Advancement of Women-2008 and the National Action Plan, which was prepared in response to the Beijing Platform for Action (PFA). The Bangladesh Government has also formed a National Women SME Forum under the SME Foundation of the Ministry of Industry to promote women’s participation in formal economic sectors.

The Poverty Reduction Strategy Paper (PRSP), which is now the main document for national development in Bangladesh, also incorporated some noteworthy issues to ensure women’s participation in social and economic life. The industrial and SME policies 2005 of Bangladesh Government have emphasized women entrepreneurship development, particularly in SME sector. Despite various initiatives from different corner of the state, the level of participation of women in the mainstream economic activities, especially private sector, remains insufficient and the percentage of women in business and industry is still well below than that of their male counterpart.

A recent survey conducted by the PPRC, an independent research organization in Bangladesh, on `Local Business Dynamics’ showed that female constitute only 1% of the sample indicating the very limited presence of women in formal business. It is inspiring to mention here that a new women’s entrepreneurs class is increasingly emerging each year taking on the challenge to work in a male-dominated, competitive and complex economic and business environment.

Not only have their entrepreneurship improved their living conditions and earned more respect in the family and the society, but they are also contributing to business and export growth, supplies, employment generation, productivity and skill development of the country. Even though, women are entering into business sector everyday, they are still vulnerable and marginalized.

One of the indications of their marginalization is lack of information and statistics about the situation of women entrepreneurs. This is also difficult to address the issues of women entrepreneurs without having proper data on the situation of women entrepreneurs, specially rural and micro women, as they are still prime groups among country’s women entrepreneurs.

Findings & Analysis

Age From a survey it was revealed that the age of the women entrepreneurs varied from less than 20 years to 61 years and above. From the figures provided we find that the age of the majority (41. 64%) of the women entrepreneurs were between 31 to 40 years.

This shows that having maturity through age helped them operate their business enterprises with confidence and steadiness. It was an age group where the women had the capacity to run enterprises with stability and reliability, overcome obstacles with courage and make decisions with confidence.

It is a known fact in Bangladesh that women face criticism working outside homes and especially for women entrepreneurs who have to transact with male counterparts for marketing of products and also for production requirements. However, women of this age group have the courage to face the social criticism and at the same time control both their business and also their family activities with self-esteem and self-control.

These women can work hard and also convince the male members of their families and also the society for their income earning sources, because of their maturity in age and the power to overcome obstacles with confidence. The next highest number of women entrepreneurs (28. 02%) belonged to the age group of 21-30 years where the women revealed the enthusiasm of younger females who endeavored into business professions with zeal and courage, initiating an income earning capacity and overcoming problems with the strength and courage of the younger generation. It was found that the greater the age, the lesser was their participation in the business profession and activities. The aged women were lesser in the trade as seen with the figures of 18. 36% in age group of 41 to 50 years and also the figures of 4. 93% in age group 51 to 60 years.

Moreover, the strength to work, the courage to meet the struggles of the profession and the diligence and meticulousness of the management of business was insecured for women in the age group of over 61 years and above. That is why only 0. 68% women entrepreneurs were found in this age group in the survey. Similar was the findings with young girls less than 20 years (3. 2%), who were not allowed or encouraged by their families and the society to enter the profession due to risks involved and also for the lack of confidence in dealing with serious business complications.

Regarding the educational status of the respondents, it was found that 97. 9% of the women entrepreneurs had education from below SSC to Masters Degree including some professional degree. Majority of the women entrepreneurs (30. 63%) had education below SSC,25. 51% SSC , 21. 55% HSC,14. 98% were graduates, having B. A. /B. Sc. /B. Com degrees. It was found that only 4. 44% had completed their Masters Degree having M. A. /M. Com. /M. Sc. / M. Ag. /MBA degrees. Among the respondents, only 2% had a professional MBBS degree. Since the adult literacy rate (15 years and above) of females in Bangladesh is 48. 8% (BBS, 2008), it is natural that women entrepreneurs would not be highly qualified or educated.

Yet it was true that in spite of their less education, women had succeeded in their entrepreneurial pursuits through the proper use of their talents in business. Though education is necessary today for business development especially for international market and trade, their lacking are met through the various trainings offered for business development for women by NGOs and training institutions in various business issues especially in the urban areas, assisting these women entrepreneurs to succeed.

The fact that the married women had greater freedom to work outside homes or become women entrepreneurs is because families ties helped women to contribute economically for the family. Moreover, the married women had better opportunities to start business as a career and earn income as women entrepreneurs, since people talked less about married women regarding their off-home activities,especially on income related issues. They had lesser fear of any victimization or problematic situation since their husbands and family members were there to help them out in case of troubles. Their mobility was lesser restricted and husbands most often protected them in case of any serious problems.

Among the lone women who were single, it was found that 10. 63% of the total respondents were unmarried, while 4. 15% were widows, 1. 35% were divorced and . 0. 48% were separated. These single women entrepreneurs were the heads of the families of female-headed households and constituted16. 8% of the total respondents.

Types of Enterprises

The types of enterprises operated by women found were of the following categories:

• Traditional;
• Non-tradition;
• Household or Family Trade;
• Labor intensive;
• Export oriented;
• Industries with modem technology.

The women have been found to participate in the following:

1. Self-Employed: These women have acquired on their own, especially from parents, relatives or friends, the skills and capacities to operate enterprises. Some have under-gone training and apprenticeship or worked as skilled laborers and obtained enough knowledge to start their own business. Self-employed women are lesser in urban areas in comparison to rural areas where greater opportunities lie with the income generating activities of NGOs, which provide credit
2. Enterprise Ownership: These women, are the Owner/operators of existing micro-enterprises, and have proven management and technical skill in self-employment. They often wish to expand, upgrade or diversify their business through employment of family members as apprenticeship especially in the rural areas or engage and hire workers for the production when the business progresses in the urban areas. This is the popular structure in the urban areas, where market availability helps the women to develop their trade. Many women working as skilled laborers have ventured to start their own business.
3. Manufacturing: Women’s traditional skill enable them to take up manufacturing in areas where raw material for the products is easily available. Women in these activities employ workers as skilled, non-skilled, permanent or as seasonal workers. With the expansion of business and the development of quality products, training in skill, technology, management and marketing becomes essential.
4. Family Trade: Many women are involved in the family trades, hereditarily performed through generations and the skill is traditionally kept within the family. Women in such activities have their enterprises or employment based at homesteads. Manufacturing handicrafts or pottery, involved in food preparation, operating individual units of embroidery, tailoring printing, dyeing, weaving, spinning, net making, etc are some of the activities in this structure. These women are helped by family members including males.
5. Agricultural Activities: The rural women participate more in the agricultural sector, especially in operating vegetable gardens, horticulture production, nursery or even rice husking, and preparation of varied rice products.
6. Sub-Contracting: This new system of generating income in the non-formal sector is providing opportunities for women through a negotiable procedure obtaining orders for products from either, exporters, producers, whole sellers, and middlemen. Women even get orders from enterprise owners, who produce their supplementary goods through these women during peak market demands and these continuous orders provide the women with a stable income. Though the income is not very high, there exits less risks regarding payment.
7. Partners in Business/ Shareholders/ Directors in Family Business Enterprises: Many of the women have become partners or shareholders in larger business firms and industrial units. Some have entered the family industrial or business operations.
8. Traders, Contractors, Order Suppliers, Business Executives: These new occupations have been mastered by the women even though they have to compete with the men. Though the women have to face tough competitions in these areas, it is remarkable to observe that they have proved themselves efficient in their dealings along with men and have succeeded in their endeavors.
9. Medium and large Industry Owners: Women have become owners of medium and large industrial units either through inheritance or through private initiative. Many educated women are now the proud owners of shipping companies, tea gardens, trading centers, and advertisement firms
10. Women as exporters have ventured into exports directly by themselves or through otherexporters: Export fairs, international trade fairs, single country fairs and initiative by importers have helped the women to produce quality products for exports.

Types of Production

Units and Trades include the common small scale production units such as Handicrafts with various types of raw materials, Handloom Weaving & Spinning, Basketry, Mat making, Manufacture of Coir products. Fishing Net making, Paddy husking by Dheki, Oil production by Ghani, Jute production and sale, Jute goods production. Pottery, Cane and bamboo products, Seri culture, Silk weaving, Honey Making, Screen print & Batik, Embroidery, Dressmaking. Tailoring, Puffed Rice Making,

Food production (packed or retail sale of dry food), Food Processing, Wood craft & Furniture, Molasses making, Biri (indigenous cigarette made with special leaves) production, Milk production units, dairy and milk products, Dyeing and printing, Book Binding, Confectionery etc. xi. Non-Farm Activities: Cane product and jute carpet making, pigeon rearing for sale, petty trade especially with home-based shops, pond lease for fish cultivation and marketing, flower growing for sale to flower shops in the urban areas, fan and cap making. Small shop keeping, photocopy services, boutique shops, home-based garments making, painting and making of greeting cards, paper-bag making & selling, selling of old tyres etc. xii.

Innovative Products and New Areas: With the introduction of new technology, development of innovative ideas or even demand for new products, a variety of new areas have developed for women’s entrepreneurship growth. These include, artificial flower making, production of straw caps and hats for export, printing of stationery and cards, vegetable dye products for dyeing and printing, patch-work quilt making, cotton spinning from waste garments, stuffed toys, decorative costume jewellery, manufacture of imitation jewellery. Women have also ventured for artificial pond preparation for shrimp culture, women’s pisci-culture project for both domestic and export marketing.

The Articles 26 and 27 provide for cultural, social and political development of the women folk. The Article 28 on the other hand mentions the issue of equal economic right and opportunities and development of women entrepreneurs. The constitution also includes the issue of the development of the women entrepreneurs (Annex 1).

Government’s strategies for women entrepreneurship development Government has set distinct strategies in its National Action Plan (NAP) for the development of the women entrepreneurship, which are:

• Adoption of a comprehensive sustainable industrial policy that will promote equity for women and men;
• Increase the number of women entrepreneurs;
• Ensure women’s easy access to markets;
• Develop entrepreneurial skills of the women;
• Provide infrastructure facilities for women entrepreneurs;
• Upgrade technical “know-how” of women and develop technology suitable for women;
• Enable MOI and other related ministries and agencies to address and implement WID issues in comprehensive and coordinated way for effective implementation of the Industrial Policy;
• Support research, evaluation and action oriented programs of industry particularly for women engaged in the industrial sector.

The Fifth-Five-Year Plan of the country clearly reflect objectives of the development policies and National Action Plan (NAP), which commit:

• Ensure equal rights of women in all spheres of development, including access to information, skills, resources and opportunities;
• Enhance the participation of women in political, civil, economic, social and cultural life;
• Promote economic self-reliance for women, and generate economic policies that have positive impact on employment and income of women workers in both formal and informal sectors;
• Create appropriate institutional arrangements with necessary financial and human resources and authorities at all levels to mainstream women’s concerns in all aspects and sectors of development
• Mainstream women’s concern in agriculture and rural development, industry and commerce besides services;
• Ensure the visibility and recognition of women’s work and contributions to the economy.

Credit policy for Women Entrepreneurs There is no credit policy in the country, which could be devoted for women entrepreneurship development. Certainly it could be questioned: Is specific credit policy necessary for the promotion of the women entrepreneurs? Is it not tenable since the government is issuing or has issued policies concerning almost all the sectors, which have preponderance of private sector involvement including women entrepreneurs. Is not it sufficient to have a well designed credit policy of the country within the framework of a more comprehensive financial policy, which certainly include the necessity of the women entrepreneurs?

There is no policy prescription in the Industrial Policy 1999 that suggests that bank or other financial institutions should have special arrangements for financing women’s enterprises. The Industrial Policy does identify women and their financial or other needs what is done in India where Industry Policy incorporates special arrangements for women enterprises. Thus, it is expected that overcoming the shortcomings of the Industry Policy ’99 in respect of special financing arrangements for women enterprises like permission for using share market for capital mobilization may be considered. In Bangladesh, a special bank named BASIC is established with the mandate to finance small and cottage industries sector.

Since its direct lending program could not be so successful, so it is now operating through NGOs in this respect. But, unfortunately, its mandate is not adequately utilised by the lending of NGOs. The NGOs do not finance small industries or even cottage industries of higher levels. The statistics from1998 in respect of this function of BASIC show that out of 237 projects directly funded by the bank only two were women entrepreneurship related. BASIC’s involvement in funding women’s enterprises can, therefore, be termed very insignificant, in that respect, the function of BASIC is not worth mentioning.

Financial Intermediaries & agencies support 

The Dhaka Chamber of Commerce and Industry (DCCI) DCCI is a limited company incorporated under the Companies Act 1913. It was established in the year 1958. It is the largest Chamber of this country at least in terms of membership strength. DCCI has its training cell. Besides, a training institute in the name of DCCI Business Institute (DBI) has been initiated. The Dhaka Chamber of Commerce and Industry (DCCI) acknowledged that in Bangladesh women live within the constraints of a conservative society where men are the customary bread earners. Apart from the domestic duties, women have, however, to shoulder a major part of the economic burden of the society to share family expenses.

The DCCI assumed that most of the constraints deterring economic Empowerment of the women are lack of access to economic resources, including credit, absence to support services, better training and skills, limited access to power and lack of access to larger quantum of resources. So, initiated two projects – one is TIPS and the second the DCCI-CIPE, ERRA Project supported by the US Chamber of Commerce, Washington, D. C. , USA.

Standing Committee of the DCCI DCCI activities run through a number of important standing committees. Women Entrepreneurship Development standing committee is one of such very important committees which acts as the nucleus to activate the women entrepreneurship development activities in the chamber.

The committee works for finding out ways and means for the growth and development of the Women Entrepreneurs engaged in business and industry and to educate and encourage them for participation in nation building activities. The committee arranges meetings, seminars, symposiums to create adequate awareness in this regard. It also works for creating favourable environment and circumstances for inducting/engaging women entrepreneurs in the field of trade and industry and to help them in setting up business houses in all possible ways. The committee also formulate suggestions and recommendations for improvement of services to this class of entrepreneurs by the government/public institutions and organization. The problems of the women entrepreneurs are raised and mitigated through the standing committee.

Micro Industry Development Assistance and Services (MIDAS)

Micro Industries Development Assistance and Services (MIDAS), a private sector organisation, promotes development of small enterprises with a view to generate employment opportunities. It was formed with the financial support of USAID in 1982 and assisted till 1993. Now it is a self-sustained counselling organisation for the promotion of micro industries, which has the following functions:

• Collation and dissemination of information on small and micro enterprises,
• Carrying out socio-economic studies and research,
• Identifying industrial projects of innovative nature,
• Promoting women entrepreneurship, providing technical,
• Managerial assistance in the from of counselling, and training to existing and potential entrepreneurs.

MIDAS Financing Ltd. the sister concern of MIDAS, a non-bank financial institution licensed by Bangladesh Bank from October 1999 under the Financial Institutions Act. 1993 has taken over the enterprise financing of MIDAS. It is also implementing the Women Entrepreneurship Development (WED) program of MIDAS, which aims at mainstreaming women entrepreneurs.