It is disheartening to know that despite the government's stimulus packages for SMEs owned by women, the funds are not reaching them. Instead, many entrepreneurs are taking loans from microfinance institutions where interest rates are around three times higher than the banks. According to a report by this daily, the government had allocated Tk 20,000 crore for stimulus packages last year, half of which was to be disbursed among people owning cottage industries and SMEs. The government put aside five percent of this stimulus package (amounting to Tk 1,000 crore) for women entrepreneurs only. Another stimulus package amounting to Tk 1,500 crore this January was also set aside with the same intention. The interest rate for taking loans from the second stimulus package was almost half of the first one (four percent only). So why are women entrepreneurs not being able to take advantage of this opportunity?
For one thing, many women entrepreneurs are still not even aware that these funds exist. A recent study by Center for Policy Dialogue (CPD) found that almost 59 percent of women entrepreneurs were completely ignorant about these packages. Even in the case of women entrepreneurs who were aware of the stimulus package provisions, a lack of information about the process of applying for these loans, along with worries about repayment and lengthy processes, were acting as deterrents. There have also been cases of bank officials discouraging them from availing the government loans and making the process more difficult.
While we commend the government for allocating a sizeable sum for female owners of small businesses, it is disappointing to see this continuous disconnect between government policy action and the realities on the ground. We believe it is high time for the authorities to listen to the experts and accept their solutions on how to ensure the stimulus packages reach those who need it the most. One of the suggestions is that cash incentives, rather than loans, would be more effective in easing the burden of women with small businesses in the informal sector. Also, if medium-sized enterprises were exempted from paying VAT for at least three years, they would be able to sustain their industries for the next few years. Finally, concerned authorities have to carry out massive awareness raising campaigns across the nation to let small-scale businesswomen know how to avail government's funds, and banks, especially government-owned ones, must be more efficient in this process. At a time when the global pandemic has forced more than 41 percent of small businesses run by women entrepreneurs to close down (according to CPD), the government must do more to ensure these women do not fall into poverty despite their existing a safety net, simply because of difficulties in access.