Banks are not disbursing minimum 15 percent of the SME loans to women entrepreneurs as directed by the central bank.

According to banking sources, the loans being provided to women entrepreneurs would be hardly 8 percent of the total SME loan disbursement.

Several women entrepreneurs alleged that banks show little interest in funding their business ventures. They also alleged that financial institutions charge them interest higher than the central bank-fixed single-digit rate for the small and medium-sized enterprises (SMEs).
Bankers, however, blame women loanees for the low rate of fund disbursement to them.

They said many women borrowers diverting the SME loans or transferring businesses to friends and families have appeared as deterrent to the fulfilment of the target set by Bangladesh Bank.

Bangladeshi Bank sent letters to top executives of the commercial banks earlier this month cautioning them against realising higher-than-authorised interest rate from SMEs.

The letter signed by SME and Special Programme Unit General Manager Swapan Kumer Roy said the banks cannot charge SME entrepreneurs more than 9 percent, including bank charge. 

The letter also reminded the banks of the central bank instruction to disburse at least 15 percent of total SME loans to women.

Bangladesh Women Chamber of Commerce and Industry (BWCCI) President Selima Ahmad told the daily sun that banks show a little interest in issuing loans to businesses owned by women.

According to the women-only chamber, around 24,000 female entrepreneurs are currently doing businesses across the country, of which over 800 are directly connected to the chamber.

Selima said women entrepreneurs have proven that they can run businesses and organisations in addition to looking after family affairs.

The women business leader also noted that the ceiling of loan for women should be increased from Tk 25 lakh to 1 crore as the production cost is increasing.

Talking about the issue of loan disbursement to women, Syed Mahbubur Rahman, Chief Executive Officer of Dhaka Bank, said: “Banks are following the central bank regulation.”

“However, in our inspection, we found many cases of channelling funds received by woman entrepreneurs to their husbands or brothers.

The reality of women entrepreneurship ends here.

As a result, some banks run additional inquiries before disbursing loans to women,” he added.