40-50% of women’s loan applications are rejected

By on September 24, 2022 0

A study titled “Assessing the Current Ecosystem of Financial Products for Women in Bangladesh” revealed that 40% to 50% of loan applications from female entrepreneurs in the country were rejected due to lack of required documents.

Lack of a renewed business license, guarantor, financial and transactional history of the company, insufficient business knowledge and a poor business plan were the main reasons for the rejection of business applications, according to the study. women’s bank loan in the country.

Fahmid Kaisar, Business Consultant at LightCastle Partners, presented the study paper during a webinar on “Innovations in Financial Services: Are We Addressing Women’s Financial Needs and Inclusion Challenges,” hosted by the Aspire to Innovate (a2i) project under the ICT Division on Wednesday.

Kaisar offered a series of recommendations to regulatory agencies as well as service providers to ensure increased lending to women entrepreneurs.

He urged regulators to incentivize financial institutions to meet disbursement targets set for women entrepreneurs and encourage them to set up women-friendly branches.

He also recommended that financial institutions facilitate capacity development programs for women entrepreneurs, market products according to beneficiary types and introduce digital accounting for small and medium enterprises.

He urged microfinance institutions to offer preferential rates to women who are directly involved in the business, adding that this will encourage women to actively take ownership of their participation.

Women’s financial inclusion is necessary to improve gender equity, increase women’s empowerment and asset ownership, Fahmid said, adding that it will also contribute to better financial management.

Jayasree Bagchi, Director of Financial Inclusion Department at Bangladesh Bank, said the central bank has taken many initiatives to help women entrepreneurs.

The financial sector aims to increase the ratio of CMSME loans to women entrepreneurs to total CMSME loans to 15% by 2024, he mentioned.

In addition, a separate window has been set up for women in each bank branch.

A seed fund of Tk500 crore is being launched for new female entrepreneurs.

Rezaul Hossain, managing director and CEO of mobile financial service provider upay, called for concerted efforts from four sectors – mobile, internet, smartphone and financial institutions – for digital finance.

Sonia Bashir Kabir, managing director of SBK Tech Venture, said women entrepreneurs should learn why they need bank loans.

Many small entrepreneurs are afraid to take loans from banks. This fear must be overcome. The products should be offered to women, she added.

Nahid Sharmin, a2i gender specialist, moderated the webinar, also addressed by Bipasha S Hossain from Swisscontact Bangladesh.