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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 Bangladesh 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 Bangladesh to a

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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middle- and high-income level respectively. The 7th Five Year Plan (2016-2020) of the
Bangladesh government 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 development 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.

A women entrepreneur is defined as a woman who has, alone or with one or more partners,
started or inherited a business and is eager to take the financial, administrative and social
risk and responsibilities and participate 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
commodities 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.

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http://albd.org/articles/news/32391/The-growing-women-entrepreneurship-in-Bangladesh

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.
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During the last decade, several initiatives were taken in favor of women entrepreneurship,
apart from allocating 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 volunteer 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 entrepreneurs.

 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 entrepreneurship 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.

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 government banks.

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.
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Since March 2020, all business activities of small women entrepreneurs being stopped due
to imposed lockdown 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 advancement 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 businesses 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 production. In fact
such festival-centric businesses have come to a standstill this time. As a result, the small
enterprises 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

Methods and Duration of Observation

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.
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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 advancement 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 necessary 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 interest 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 following 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
enterprises due to loss of their capital.
 They are not clear on how they will repay the loans collected from various organizations.

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.
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 Not being able to meet the needs of the family, this has increased stress, as well as fear
and anxiety. As well as not being able to meet the cost of education, the children of the
family are likely to drop out of school.
 Due to the economic crisis, their family members are also being deprived of access to
healthcare.
 Due to the complexity of their business closure, they are not able to engage in various
social activities. Their movement is becoming limited. The likelihood of their
involvement in local level power structures is declining.
 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
entrepreneurs 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 Chittagong 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

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.
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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 kameez, making tripods including Punjabi and dress, making bedsheets,
making window curtains, weaving, pottery, puffed rice selling, making sweets,
chanachur, making bread etc. Each of the women entrepreneurs works with 5 to 10
helping hands outside of their families.

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†dvb: +880258156505, 01740914010

Interest and Condition free loans for rural small women entrepreneurs - Interview-based report by Steps and Gad Alliance; June 2020.