20th Anniversary Supplements Archive

Emerging women entrepreneurs in SMEs

Professor Masuda M. Rashid Chowdhury

Photo: Jashim Salam Drik News

Bangladesh is a developing nation, rich in human resources where women constitute slightly less than half the population. The majority of them are underprivileged, under nourished, illiterate and poor. Moreover, there are not enough employment opportunities for women. Therefore, economic activities, through self-employment have become essential for potential working women. As a matter of fact, women entrepreneurship or “women in business” has gained importance and acts as a very recent phenomenon in Bangladesh. Although women are taking to entrepreneurship in many challenging fields, their activities in Bangladesh are not that extensive. However, in spite of fewer opportunities, many women have succeeded in business, though they are still very small in number.

Entrepreneurship has been regarded as one of the important determinants of industrial growth both in the developed and in the under-developed countries. Despite its importance for the economy, the emergence of women entrepreneurship in SMEs is a new phenomenon all over the world. In Bangladesh, women entrepreneurship started developing in fact after the Liberation of Bangladesh. Very few women entered the profession of business before the seventies. Bangladeshi women entrepreneurs need to have an extra quality in the form of dogged determination and resilience since this is needed to fight with adverse situations which seem to confront the female entrepreneurs than their male counterparts in the present-day context.

According to the Bangladesh Economic Review 2009, around 6 percent of the country's $90 billion economy comes from SMEs, which is also the largest sector in terms of employment generation. (Daily Star December 29, 2009). Bangladesh is rightly dubbed as a country of the SMEs. Bangladesh industrial economy is thickly populated by these industries which amount for over 99 percent of the private sector industrial establishments and provide more than 80 percent of industrial employment. The relative SME shares in total GDP range between 25-30 percent and that in manufacturing value added vary between 40-45 percent (Ahmed Momtaz Uddin 2008). The sector is currently exhibiting dynamism by registering an average annual compound growth rate of over 7- 8 percent in their value added shares to GDP.

In the context of a developing country like Bangladesh, where SMEs are the engine of growth, the emerging new class as the SME women entrepreneurs in both the urban and rural areas of Bangladesh are now turning the situation as a crucial progress in national development. Though there has been substantial participation of women in the off-house activities of late, women are yet to assume a dominant role in mainstream economic activities. In Bangladesh, poverty alleviation through economic growth, as well as employment generation on mass scale is heavily dependent on the development and expansion of SMEs. With increased family income for the poor, the income disparity in the society would reduce to certain extent. Rising rural income prevents migration of the rural poor to urban centres in search of jobs and reduces further burden on the already strained urban infrastructure. If remedial measures are taken for impediments, SMEs owned/managed by women may trigger on economic breakthrough and set a virtuous circle of rural growth in motion.

Photo: Amirul Rajiv

A large number of women work in the informal sector in Bangladesh, but the real value of their participation and contribution is not recognized in the society. Differences and inequalities between women and men exist in terms of opportunities, rights, and benefits. There are various constraints in the way to the up-gradation of their skills and enhancement of their productivity. These include poor access to market, information, technology and finance, poor linkages and networks with support services and an unfavourable policy and regulatory environment. However, it is heartening to note that despite many barriers, the new women's entrepreneur class in the Small and Medium sector has developed in the country taking on the challenge to work in a male-dominated, competitive and complex economic and business environment. It has been found that at present 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. Inspite of these, in Bangladesh, not only have the women's entrepreneurship improved their living conditions and earned more respect in the family and the society, but they have also contributed to business and export growth, supplies, employment generation, productivity and skill development. Establishment of women entrepreneurs' enterprises started growing during the seventies and increased during the eighties and nineties. The highest record of enterprise establishment was during 2001-2005. Nearly 50% enterprises were established from 2000 to 2010.

The important aspects of women entrepreneurship in SMEs in Bangladesh includes the starting of business enterprises, the reasons for enterprise development, the initial and current investment, the problems met in business, the impediments faced in family and society, the products manufactured or services rendered, the achievements as entrepreneurs, the future plans, the contributions towards family and the successes attained as entrepreneurs. Women entrepreneurs face various problems in business including lack of capital, insufficient experience, unavailability of raw materials, lack of marketing opportunities, difficulties in attainment of skilled workers and problems of accounts keeping. To solve these problems both government and non-government organizations have lent a helping hand through various programmes.

Characteristics of Women Entrepreneurs in Small & Medium Enterprises (SMEs)
Various studies have shown that the age of the women entrepreneurs varied from less than 20 years to 61 years and above. The age of the majority of the women entrepreneurs were between 31 to 40 years where the women had the capacity to run enterprises with stability and reliability, overcome obstacles with courage, face the social criticism and make decisions with confidence. It was found that the greater the age, the lesser was their participation in the business profession and activities. Majority of the women entrepreneurs had education below SSC, while some had completed HSC, but no women entrepreneurs were found to be illiterate. A recent survey of SME Foundation informed that 4.98% women entrepreneurs in SMEs were graduates, while only 4.44% had completed their Masters Degree, and a few had professional degrees. It is true that in spite of their less education, women had succeeded in their entrepreneurial pursuits through the proper use of their talents in business.

It has been found that the majority of the women entrepreneurs of Bangladesh were married. 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. However, it is found that the largest segment of women entrepreneurs belonged to nuclear families, while only less than 15% belonged to joint or extended families. It has been seen that women in nuclear families had greater freedom to work as entrepreneurs, with less interference from in-laws and other members of the family. It has been observed that the largest number of these women entrepreneurs were only housewives before they entered into their careers as women entrepreneurs, though some were previously students, and a few were in service or were unemployed.

Interestingly the most common motivating factor of women to enter into business was to add to family income. Some were motivated by self financial benefits and some women had taken up entrepreneurship as a profession in order to form a career and emerge triumphant in life as a successful personality in business. Many had taken up the profession in order to do something worthwhile in life and devote their lives for the development of the country.

It is important to note that women faced various types of impediments both from their families and also the society in becoming an entrepreneur. Majority of the women entrepreneurs informed that the impediments came from parents, in-laws and husbands who did not like them to enter into business and become entrepreneurs. Impediments from society for women's entrepreneurship development came as a challenge for women knowing that the people generally did not like women to be in business and allow them the freedom to perform for economic development. Social conservativeness of the society and the general public regarding women's business involvement, misinterpreted religious beliefs and hindrances towards women's empowerment acted as the main impediments for the women to enter into business activities and become successful entrepreneurs.

Among problems encountered it was found that women faced difficulties in getting cash payment from wholesalers, some complained of the troubles created through the teasing of women entrepreneurs by young people and also of the pressure and demand of unusual tolls and bribes, which created crisis in business transactions. It is true that the women faced the problems of lack of business knowledge and also deficiency in educational qualification needed for business operations.They faced problems due to less experience in business and insecurity in business dealings, which were dominated by men.

Women entrepreneurs lack resources or capital due mostly to unequal inheritance. For bank loan women need to give collateral. It is a social problem that loans to women need to be guaranteed by their husbands or fathers, though this is not a legal requirement. On the other hand, families feel more comfortable supporting financially a son, than a daughter for capital.

Nature of ownership of business and position of the women entrepreneurs in business as found in a study of SME Foundation, show that the highest number of women have sole ownership of business. Majority of the women belonged to the Small Enterprise Sector and they were proprietors of their business. The highest numbers of proprietorship enterprises were found to be from Dhaka. Some in the Medium Enterprise sector had Family Ownership, Partnership Business or were Share Holders in Companies. Women entrepreneurs were either Directors in their business, Managing Directors in their firms, or Chairman of their companies. Many worked as managers of enterprises while some held various other positions in the enterprises, along with different ownership arrangements.

The majority of the women entrepreneurs 87.5% managed their sources of initial capital out of their own savings. It was found that Husbands of 32.2% women provided them the initial capital. Moreover, fathers, NGOs, government agencies, friends, mothers, Non-Bank Financial Companies, public and private Commercial Banks provided initial capital, while some managed their money through money lenders and also their inherited property. 21.84% women entrepreneurs in SMEs did inherit some property which they utilized for business. A recent survey mentions that less than 50% women entrepreneurs owned or rented showrooms for the marketing and sale of products of which the highest numbers were owned by women entrepreneurs of Dhaka, followed by those of Chittagong and Sylhet. Around 48% of women entrepreneurs were involved with their own business promotional activities and direct sale of their products and services, while others utilized the services of distributors, whole-sellers, retailers, hawkers and Commission agents. Business development and increase of promotional activities depended to a great extent on the modern system of access to IT but only few had access to IT and less than 90% did not have any training on computer operations. Internet facilities were available to only 5% women entrepreneurs and business enterprises of 96% women entrepreneurs did not have email account and only 1.2% had a website. Hindrances to marketing of products included lack of security and safety in market followed by lack of knowledge about market and lack of suitable market and various communication problems. Most women entrepreneurs participated in trade fairs. It is observed that in the SME sector, majority of the small enterprise owners participated in local, regional, seasonal, festival fairs and some in national trade fairs.(Survey of SME Foundation)..

Business Management and preparation of Business Plans are not easy for entrepreneurs. Women usually managed their own business but with regard to large companies, male professionals were employed. Women claimed that less than 50% entrepreneurs had Business Plans, which majority of the women themselves prepared. Accounting & Book Keeping was supervised and maintained by themselves, though women with larger establishments employed accountants for their business firms. Total Consciousness of Bank transactions and maintaining of Bank accounts did exist among the majority of the women entrepreneurs of the country.

Strengthening of women's position in business and international trade promotion of the women entrepreneurs could be attained through increase of business contacts nationally and internationally, training on International Marketing, financial support from banks, information on trade fairs and participation in International Fairs, creating opportunity for export, role of Association for strengthening the women as entrepreneurs, skill development training opportunities for making quality products, increase and strengthening of good business contacts, increase knowledge of business through seminars, obtaining good technical support, receive additional capital from banks for developing business and international trade promotion.

Roles, responsibilities and status of women entrepreneurs in family showed that many of them were the heads of their families considering the fact that the women entrepreneurs were also the heads of the households. Women of Female-headed households were found to take up the profession of entrepreneurship more quickly than those women who had husbands as their family heads. Families of majority of the women entrepreneurs were headed by their husbands. Most women entrepreneurs informed that they themselves played the main role in business, though in a few cases their husbands, fathers, brothers and relatives played the main role. In domestic work the main role women entrepreneurs themselves played the main role, while in many cases maid servants, husbands, mothers, sisters and in-laws played the main role. Monetary Contribution to family expenditure showed that more than 90% women entrepreneurs contributed to the family expenditure.

Photo: Wahid Adnan/Drik News

Major problems faced in society by the women entrepreneurs were those which the women in this country faced when they tried to use the freedom of movement in this male-dominated social structure, while family heads did not approve of women working out-side homes. Among the complains provided were that religious leaders did not approve of women in business and these issues became religious barriers by people in this male dominated society, security problems faced in business and at work, social insecurity due backbiting of the society including nasty remarks and dirty comments about women's free movement as businesswomen, inability to move alone at night safely, women's unacceptability in their free movement along with their male entrepreneurs, transport problem for marketing and movement, inability to participate alone in social work and enjoy social occasions, non-cooperation of the society people regarding business development and out-house activities, hindrances of women's free movement in the society, negative attitude of the social leaders, prevention by society to allow women in business or work out-side at night, teasing by men & hoodlums.

The main harassments faced by the women in SME business was with problems involving lack of capital, crisis created by absentee employees in business, delay in loan processing, problems involved in production, sale of their products on credit, non-cooperation of the whole sellers and irregular cash payment hampering the smooth running of their business, dirty attitude by the whole sellers while recovering money, demand for illegal tolls demanded by youth of locality. Incidences of hijacking, threat from terrorists, harassment of law enforcing agents, lack of safety for fair price, theft of goods, infrastructure problems, lack of electricity were other types of harassments worth mentioning for the women entrepreneurs.

Overall Suggestions in overcoming problems faced by the women entrepreneurs, included organizing training on product design, skill and business development including accounts management, providing financial supports, introducing user-friendly loan procedures, reducing the existing duties on raw materials for reducing production cost, giving various facilities for entrepreneurship development, establishing technical institutes for product development. Other suggestions included building special markets for women, introducing financial incentives to bring more women to business, sales & marketing and also ICT training for building women entrepreneurs to become more proficient in doing business and provide loan at low rate of interest to run their business smoothly. Provision of collateral free loan with low interest, make the products competitive against imported finished products. Reducing rampant corruptions of the officials of all ranks and files, organizing vigorous awareness program for religious leader, family, society head and others could change the attitude of people towards women entrepreneurship, Moreover, the problem of women entrepreneurs could also be solved if they were well organized and have strong women associations at all divisions/districts through which they could fight for their rights and requirements.

In terms of achievement in business, almost one-fourth of the women entrepreneurs in Bangladesh were found to have gained financial stability, a great many have become self dependent, earned goodwill and success in business, while some contributed to their family financially, earned respect from family and society, achieved sustainability in business and earned prestigious business awards. A survey of MIDAS informs that 53.9% of the women entrepreneurs of Chittagong ranked the highest in achievement of financial stability followed by 32.9% of Dhaka. In achieving self-dependence the highest was by 44.4% women of Barisal followed by 32.7% of Khulna.

It has been revealed that the women entrepreneurs contributed towards the family in various ways including firstly the bearing of family and household expenditure, followed by bearing personal expenditure without burdening family, bearing cost of children's education, contributing to health care service for the family, creating employment for family members, encouraging women to become self dependent in the family, establishing peace and harmony in the family, contributing towards solving social and family problems and providing nutritious food to the family members, enhancing the family prestige, as well as the family image and status in society, contributing towards family in crisis, earning social respect as member of an established family through financial contribution, raise consciousness in family on women's development and also providing assistance to marriage of destitute family members.

Women Entrepreneur contributions towards society included creation of employment for the people, assisting poor people, encouraging women in business, contributing to establish agri-based productions, helping poor and helpless women and providing financial help, assisting to social development and contributing towards women's education, taking initiative to stop early marriage and creating employment for uneducated women in the society, controlling violence against women and provided training to women to become entrepreneurs.

One of the greatest achievement in this country is SME development by women entrepreneurs, who have taken tremendous risks in spite of the impediments to their out-house activities and also overcome numerous constraints to women's empowerment in this country. It is encouraging to note that women have taken to entrepreneurship and a large number of women have become successful in their ventures. Many organizations have assisted women entrepreneurs in running business by providing different facilities for meeting their financial, marketing and training requirements through which many have emerged successful in various business activities. This clearly portrays the excellent position of women entrepreneurs in the country despite all the barriers confronting them at all levels of their activity in the society. It is encouraging to note the courageous endeavours of these women through which they have become successful in their ventures. Social barriers are going down and a greater number of women are becoming educated through the opportunities provided to them along with their socio-economic development. Women as entrepreneurs have turned successful as manufacturers, exporters, importers, order suppliers, business agents, boutique owners and product designers by taking up challenging tasks previously unknown to them and initially posing as risky, uncertain and perilous. Their status in life has increased and they are now given importance as entrepreneurs. Today women entrepreneurs are contributing much to the financial status of the family and also participating in the socio-economic development of the society.

Photo: Star Archive

Marketing opportunities are increasing and women's participation both in the domestic and international market is showing an upward trend. Many women have become successful exporters. Their display of Bangladeshi products in the international arena has increased the image of Bangladesh outside the country.

The attitudes of the financial institutions towards women entrepreneurs are changing for the better. However, it is noticed through discussions with the women entrepreneurs that in the districts outside Dhaka women hardly get loans from the Small Enterprise Fund of the Bangladesh Bank. The majority of Bank officials are reluctant to give loans to women in the outlying districts and many have not heard of the Refinancing Scheme introduced for women entrepreneurs. In many areas the husbands refuse to become guarantors for their wives who have sought loans.

Many women manufacturers have built up their own show-rooms or rented them providing employment to both females and males. The quality of their products has increased and they are quite conscious of the importance of design development.

Many women are lacking in knowledge concerning trade licence, TIN number, VAT registration number and the process of paying income tax and VAT. Trade Licence is an important requirement in business but it was found that nearly fifty percent of the women entrepreneurs were conducting their business without valid trade license. Labour laws and environment protection are also matters not well-known to them. City Corporations of many districts have introduced various programmes for encouraging women entrepreneurs to get their Trade Licence and VAT registration. Business Chambers have also motivated them to pay their income tax and get their TIN numbers.

It is clear from many studies that women are not always viewed as agents for development in development programmes, even though there is a marked change in gender policies and gender development objectives of the government. The issue of women's development remains greatly welfare-oriented and the national budget of Bangladesh targets only poor and distressed women who have little potential for undertaking business venture. The planners often identify women as poor, distressed and destitute when they take up women's development issues. Women issues should be treated with care and on priority basis. Only then can women get their due legal and professional protection.

The aims and dreams of the women entrepreneurs depicted their ultimate endeavours through success in business, becoming successful women entrepreneurs, expanding their existing business, becoming self-dependent personalities, creating employment for others, becoming financially sound and building a poverty free society. There was a time when society rebuffed them but after their success today society recognized their achievements. Their contribution towards the national economy was through their income earning and providing employment to the skilled workers and also providing support of various kinds to the disadvantaged. Through their efforts in uplifting the status of the people and also the socio-economic development of the society they have contributed and also prepared the path of success for the future generations of the country.

Women have to bear the burdens of their families and cross the hurdles raised by the society to achieve their socio-economic development. Many women are found to have overcome the different barriers and emerge as successful women entrepreneurs of the country. Their contribution towards their families and the society is a testimony to their inherent strength in tackling any situations which may arise before them. They have paved the way for their sisters to rise from the drudgeries of life and the bane of superstitious attitudes of the males. To-day a silver lining in the dark clouds is visible as women entrepreneurs are gradually climbing the ladder of success through their socio-economic development. Nothing will push them back again, for they have learnt how to face the challenges of life. They are not only stronger and more courageous, but also more efficient, conscious, competent and well-organized. Women entrepreneurs are making their contribution to the national economy and it is they who will play their role in making Bangladesh a strong and prosperous nation.

The writer is Professor Department of Sociology, University of Dhaka and former Director, FBCCI, President, Bangladesh Association of Businesswomen and Professionals.