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Interest and Condition free loans

for rural small women entrepreneurs
Interview-based report by Steps and Gad Alliance
June 2020.
Introduction
Women’s economic empowerment is a critical factor to move a country forward towards inclusive and
sustainable development. Economic empowerment can be described as generating income for women
as individuals or groups. It takes into account the economic strength of the women itself. Scholars in the
field belief, that economic strength is the basis of social, political and psychological power in society. By
enhancing their economic empowerment, they could benefit in both socially and psychologically from
economic strength (Moyle et al, 2006)1. Often attempts to improve the situation of women in society are
focusing on economic aspects. The likelihood that parents change their opinion that a daughter is an
economic asset rather than a liability increases with the provision of economic opportunities for women
and uplift of the value of women’s labour (Hossain, 2001)2.
Like many other developing countries, Bangladesh government also had taken many initiatives to
include women in its economic development and to keep going its journey towards middle income
country. In many of its policies and actions such examples were observed and it was revealed that Ban-
gladesh government realized the fact the without women participation, economic development would
not been sustainable. Government has undertaken various steps to ensure women in development in
Bangladesh. Through the Vision 2021 and 2041 a momentum has been created for taking forward Ban-
gladesh to a

Photo: © Steps/Rubelkarmaker
middle- and high-income level respectively. The 7th Five Year Plan (2016-2020) of the Bangladesh gov-
ernment considers women’s engagement in political and economic activities as a cross-cutting issue
and one of the main drivers of transformation.
Situation of Women Entrepreneurship In Bangladesh Before Covid-19
Bangladesh during the period 2008 to 2018 achieved remarkable success in women and children devel-
opment initiatives, especially women empowerment, women's decision making, health and nutrition
and small entrepreneurship including employment generation. Now the country has become a role
model for other developing countries. These successes in the socio-economic sectors widened and
opened the scope of achieving gender equality. The Gender Gap Index 2017 formulated by the World
Economic Forum placed Bangladesh in the first spot consecutively for the second time. The Womenfolk
in Bangladesh now is playing the role of catalyst in development efforts.
1 MOYLE Tracey l. Maureen Dollard and Saswata Narayan Biswas, 2006; “Personal and Economic Empowerment in Rural Indian Women: A self-Help
Group Approach”; International Journal of Rural Management 2(2); published in Sage Journals
2 HOSSAIN M.K, M. Kabir, 2001; “Purdah, mobility and women’s empowerment and reproductive behaviour in rural Bangladesh” published for
Council for Social Development – 84-102 Social Change Vol. 31 No.3

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A women entrepreneur is defined as a woman who has, alone or with one or more partners, started or inher-
ited a business and is eager to take the financial, administrative and social risk and responsibilities and partici-
pate in the day to day management activities. Women entrepreneurship is a challenging phenomenon in
Bangladesh as women are economically and socially lagged behind. Only 18 percent of women in Bangladesh
are engaged in non- agricultural sectors. Per capita income of women in Bangladesh is only US$ 2500. The
scope of education for women is less than male. But life expectancy of women is 74.6 years in Bangladesh
compared to 71.2 of the males3.

In recent years, the rate of new business formation by women has significantly risen in Bangladesh. However,
women still own and manage significantly fewer businesses than men. Research indicates that women start
their own businesses for three personal reasons: to have autonomy and freedom in the workplace; for more
security; and more satisfaction with work. Women who are looking to find more freedom may do so because
they have been discriminated in the workplace and have not been paid equally as men. Owning a business can
provide a woman a sense of security after having experienced redundancy, divorce or other mishaps. They
also like the economic security that owning a business can provide. Those women looking for satisfaction from
business ownership want to take the challenge of improving their lots and become more productive.

Women entrepreneurs in Bangladesh are involved in different kinds of businesses, such as manufacturing,
trading, service and others. Manufacturing is a process of converting raw materials, or parts into finished
goods that can meet the consumers’ expectations; for example, knitwear and readymade garments, leather
processing and leather goods, Jute related products, handicrafts related enterprise. Trading is different from
manufacturing and in this process, enterprises engage themselves only to buy and sell or exchanging com-
modities to either wholesale or retail consumers, for example, plastics and other synthetics, garments &
accessories, wholesale and retail shops etc. Service oriented business enterprises provide benefits (intangible
products) to its customers individually or by a team, for example, education, healthcare, beauty parlor, etc.
3http://albd.org/articles/news/32391/The-growing-women-entrepreneurship-in-Bangladesh

During the last decade, several initiatives were taken in favor of women entrepreneurship, apart from allocat-
ing specific budget for this purpose in each fiscal year. Such as -

* Women entrepreneurs dedicated desk established in every bank and non-bank financial institutions.
Micro Credit Disbursement Policy facilitated women entrepreneurs to borrow Tk 50thousand.
10% Industrial plots and 10% of small entrepreneurs fund are preserved for women entrepreneurs by the
Bangladesh Bank.
Women entrepreneurs having a small capital are getting support through distributing loan among the volun-
teer Women Associations.
To promote women entrepreneurship an initiative called “Joyeeta’’ has been established in 2011. Now it is
established as Joyeeta Foundation.
Sonar Tory, Angona and Unmesh are established as sales and display centres to promote women entrepre-
neurs.
An amount of Tk.10-15 thousand is being distributed among 0.148 million distressed women with 5% service
charge in all 64 districts.
As a result of such initiatives women especially from rural areas started their own business or small entrepre-
neurship taking loan from different institutions and however sustained economically.
Situation during Covid-19 Pandemic and The Survey
Non-Governmental Organization Steps Towards Development (Steps) and Gender and Development
(GAD) Alliance has jointly collected information and data on 400 Rural Small Women Entrepreneurs
of 10 districts over telephone/mobile interview and has prepared a report.

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The analysis of data and information reveals that about 80% of total Rural Small Women Entrepreneurs
interviewed have been forced to stop their business activities after the lockdown being imposed due to
Covid 19. The rest 20% is trying hard to continue their business and facing lots of troubles. They informed us
they were required to spend their capital money of business for maintaining their household expenditure
during this disaster time. So when the situation will be normal, they are afraid they might not start their
business due to lack of money/capital.

They demanded through their interview that for continuing their business they need special allocation from
Government as well as non-conditional interest free loan from different institutions. They also demanded
that such initiatives should be conducted through Government Palli Sanchay Bank along with others govern-
ment banks.

Since March 2020, all business activities of small women entrepreneurs being stopped due to imposed lock-
down for managing Covid-19 situation, along with other Govt., non-Govt. public and private institutions.
From June 2020, some activities being started as lockdown was ease and offices and institutions reopen with
conditions. Although a limited range of emergency services, offices, courts and businesses have been started
since June 2020; Rural

Small Women Entrepreneurs have to face various obstacles and new challenges in the changed situation,
which has led some to the closure of small enterprises they have set up so far. Steps and Gad Alliance thinks
that disrupting this continuity of rural women's initiative will have a negative impact on the overall advance-
ment of women.

Moreover, Rural Small Women Entrepreneurs at the rural level have lost their long-acquired resources and
capital to ensure healthcare, including providing food to family members and for meeting various needs on
a regular basis during the Covid-19 period. At the same time they have detached of their regular customer
and business network, including losing the market for their products. As a result, their ventures and busi-
nesses have come to a standstill. On the other hand, the burden of debt is growing on them. The active
participation of Rural Small Women Entrepreneurs in the rural economy and their contribution to the family
is gradually being hampered.

In the last ten days of May, Steps and Gad Alliance, with the help of Sufia Kamal Fellows, conducted mobile
phone interviews on about 400 small women entrepreneurs in 10 districts of the country. According to the
interview, due to the lack of income of the male members of the family at this time, the responsibility of the
whole family has fallen on the women entrepreneurs. On the other hand, due to the limited movement of
people, including the closure of the local market during the Covid-19, they have been in crisis due to the
inability to sell their products. They could not sell their products as there were no buyers during the two big
festival of country i.e. Bengali New Year and Eid. These two festivals of the year are usually the main time of
their business. As a result, on the one hand, their own income has decreased, on the other hand, they were
failed to pay wages to the rural helpless women who were working with them or gave their labor for produc-
tion. In fact such festival-centric businesses have come to a standstill this time. As a result, the small enter-
prises and businesses they have acquired so far have come to a halt. The burden of debt is on his shoulders.
Their participation in social activities has decreased. Uncertainty has arisen in the education of the children
of their families.
Objectives of Interview-Based Observation
•To know about the initiatives and businesses of rural women entrepreneurs during the Covid-19 disaster
•To identify future risks of business for small rural women entrepreneurs
•To identify measures to overcome the business crisis of rural small women entrepreneurs
•To raise the issue at the national level to create a supportive environment for small rural women
entrepreneurs

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Methods and Duration of Observation

Steps has collected information of four hundred rural women entrepreneurs through
mobile/telephone interview in 10 of its working districts and a report was prepared based on the
data collected. Basically, based on 5 questions, small women entrepreneurs were interviewed on
mobile. The interview was taken by Sufia Kamal Fellows, longtime volunteer groups of the Steps
and Gad Alliance, as well as a continuing collaborator for the political and economic advance-
ment of women at the local level. In each district 40 women

entrepreneur have been interviewed. It was very difficult to conduct such activities during the
lockdown. For this reason, mobile phones have been used to collect information. This activity has
been conducted for a total of 10 days from May 20 to May 30, 2020.
Findings of the Survey
•About 80 % of the Rural Small Women Entrepreneurs interviewed are at risk of closing down
their businesses during the Covid-19 period.
•The remaining 20% of Rural Small Women Entrepreneurs are trying to keep the wheel of their
business running.
•76% of the interviewed Rural Small Women Entrepreneurs said they could not procure the nec-
essary materials from the market for the continuity of their business during the Covid-19 period.
As a result, the continuity of their production has been disrupted.
•On the other hand, 46% Rural Small Women Entrepreneurs said that they were able to procure
some essential items from the market at high prices with great difficulty due to the closure of
vehicles at that time. Due to this, they could not sell the product to the buyers due to the high
price of the product even though they were producing in limited size at this time due to increased
production cost. As a result, they have unsold products, which they doubt will be sold in the
future. Due to these reasons, Rural Small Women Entrepreneurs are under pressure from all
around.
•36% of these Rural Small Women Entrepreneurs said they had already taken loans at high inter-
est rates from local moneylenders to meet their various obligations. As a result, they are trapped
in a debt trap. They think that other Rural Small Women Entrepreneurs in the country are follow-
ing the same path.
•They also fear that their place will be vulnerable due to not being in the market for a long time.
The loss of small enterprises and business capital built by their hard work and talent will make
their future path even more critical, they said. The economic contribution that women have
already made to the family, society and the state as a whole is expected to diminish.
•Rural women who were the helping hand in their business activities with Rural Small Women
Entrepreneurs have also become jobless. Their source of income has also been cut off. So their
families are also at economic risk.

Current Challenges

•Rural Small Women Entrepreneurs are on the verge of closing down their businesses or enter-
prises due to loss of their capital.
•They are not clear on how they will repay the loans collected from various organizations.

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•Their Buyers and markets for their products have become limited which increasing economic risk.
•Some women are taking loans from local moneylenders at high interest rates as the loan activities
are currently closed.
•Even if the non-government development organizations (NGOs) wanted to help them to resume
their activities, it will be difficult for them to take out new loans as they have old ones. At the same
time, due to various complications, they are not able to take loans from banks.
•They have complained that they are being abused in family due to their failure to cope with the
various pressures of the family.

Immediate Action for Small Women Entrepreneurs

•As part of the incentives, the government should provided loans to rural small women entrepre-
neurs on easy terms and without interest.
•Exemption of interest on loans they have takenfrom various institutions. In other words, from last
March to December 2020, a total of 10 months loan interest waiver.
•To help women entrepreneurs who are interested in getting their savings back for running their
future business and enterprise by their savings. This savings they can used as their capital for future
business
•To take public and private initiatives so that their products can easily re-enter in the market.
•Bringing rural small women entrepreneurs under the social security program.
•Provide one-time support to rural women entrepreneurs as part of the incentive.

Where the Survey Conducted

Thakurgaon, Kurigram, Gaibandha, Bogra, Rajshahi, Chuadanga, Pirojpur, Jhalokati, Barisal and Chit-
tagong districts

Footnote

•GAD Alliance:The Gender and Development (GAD) Alliance is a paltform of non- governmental
organizations and volunteers working in 17 districts of the country with the aim of establishing
gender equality, human rights and good governance. This alliance is coordinated by Steps Towards
Development.

•Sufia Kamal Fellow:Sufia Kamal Fellows are the group of the leading women in the community who
are working for ensuring gender equality, human rights and political empowerment of women at
the working district and sub districts of Steps. Steps Towards Development and GAD Alliance are
coordinating this program.

•Rural Small Women Entrepreneurs: Women running various businesses or enterprises on their
own initiative at the local level. Such as- batik, boutique, kantha sewing, design of sari and selwar

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