Internship Report on the Role of SME Financing in the Development of Women Entrepreneurship in Bangladesh

The Role of SME Financing in the Development of Women Entrepreneurship is very important for overall economic development of a country particularly for developing countries like Bangladesh. As a labor intensive sector, it can provide a handsome total of national income and generation of employment rapidly in attaining Millennium development Goals (MDGs) and a faster & sustainable economic growth. Eradication of extreme poverty and hunger, gender equality and especially women empowerment process has been already triggered by this sector. Terming SME as ‘employment generating machine’, our neighboring countries have also given due importance on SMEs. The present government has put much emphasis on the development of SME sector considering it as “the driving force for industrialization” in meeting the goal of 10 per cent growth*, 40 per cent contribution of industrial sector to gross domestic production (GDP)* and for being a medium income nation within the next decade. With a view to reducing income inequality, poverty and high rate of unemployment in densely populated Bangladesh, the SME sector might be much better functioned by a towering rate of credit flow in this sector.
There are various constraints that hinder the development of SMEs in Bangladesh, such as lack of medium to long-term credit, limited access to market opportunities, technology, and expertise and business information. Lack of suitable incentives, inefficient and limited services from relevant government agencies as well as poor capacity of entrepreneurs are other reasons for the slow growth of SMEs. Obviously, the government has many things to do to flourish the SMEs because, if they flourish, SMEs will create new entrepreneurs, generate more jobs and contribute to a great extent to the national economy. This paper is an academic analysis toward the development of women entrepreneurship in respect of SME financing.

In almost every part of the world, limited access to finance is considered a key constraint to private sector growth. This is especially true for SMEs of our country as they are facing different types of problems for availing institutional finance though SMEs play dominantly important role in the national economy of Bangladesh by making up over 90 per cent of industrial enterprises, providing employment to 4 out of 5 industrial workers and contributing to over one-third of industrial value-added to gross domestic product (GDP). The relative SME share in manufacturing value-added is much higher and estimated to vary between 45 to 50 per cent of totaling value-added generated by the manufacturing industries sector. Further as important sources of new business creation and developing new entrepreneurial talents, these industries provide the much needed dynamism and vitality to the national economy. Implementation of poverty alleviation action programs and strategies is a systematic and continuous effort in Bangladesh. For that purpose, the Poverty Reduction Strategy of the government has clearly identified some core principles and parameters both at macro and micro levels for reducing the existing poverty level at least half within 2015 as targeted.