Sluggish fund for women entrepreneurs irks BB

Women work at a textile hand-manufacturing unit. After launching a Tk 105 crore fund for women entrepreneurs under its refinance scheme, Bangladesh Bank finds only 20 percent of the outlay has reached the targeted sector since May 2007. Photo: www.fredburkephotography.com

Only 20 percent of the Tk 105 crore fund for women entrepreneurs under the central bank refinance scheme has been disbursed since May 2007.
The fiasco has surprised Bangladesh Bank (BB) officials, who had identified the low accessibility of bank credit as a major problem for the women intending to start business, or its expansion.
“It is a matter of regret that the fund is not being used properly,” said Nazrul Huda, BB's deputy governor.
However, another BB official contradicted it, pointing out a rise in fund disbursement this year compared to such disbursement in previous two years.
In May 2007, a Tk 15 crore BB refinance scheme was introduced, which was raised to Tk 105 crore later. Under the scheme, banks and non-bank financial institutions (NBFIs) are eligible to avail of the facility at 5 percent interest and lend to entrepreneurs at 10 percent interest.
As on September 30, less than Tk 22 crore has been disbursed under the scheme.
Several women entrepreneurs say they have no clear idea of such BB fund. They also spell out that they feel shaky about bank loans.
Selima Ahmed, president of Bangladesh Women Chamber of Commerce, blamed banks' lax attitude and profit mongering and poor capacity of women entrepreneurs for low disbursement of loan from the fund.
“Women entrepreneurs outside Dhaka need finance badly. But bank officials there know little about the fund,” claimed Selima, who has a decade-long working experience in this arena.
The banks concerned should come forward to get their branches outside the capital well-informed of the BB fund for women entrepreneurs, she added.
“Banks also prefer lending from their own scheme to utilising the BB fund,” she said.
Nahida Sharmin, a successful woman entrepreneur, said she takes the least interest in bank borrowing.
“Several banks offered me Tk 10 lakh loan at 10 percent interest rate after I won a major SME award earlier this year. But I refused to take the loan fearing that I won't be able to repay the instalment,” said Sharmin, owner of SHAILPIK, a fashion and design house located in Dhanmondi.
Now Sharmin, a fine arts graduate, thinks of taking Tk 3 lakh bank loans for business expansion. Work orders from a foreign country have prompted her to go for bank loan, she said.
Still, hidden costs and charges a bank imposes during loan disbursement frighten her.
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