Policy Initiatives for Women's Financial Inclusion in Bangladesh

1. Setting up Women Entrepreneurs Development Unit and Women Entrepreneurs Dedicated Desk

To increase women’s participation in financial services Bangladesh Bank (BB) has established Women Entrepreneurs Development Unit (WEDU) under SME and Special Programmes Department of its Head office and Branch Offices. BB instructed scheduled Banks and Finance Companies to set up WEDU in their head offices as well as regional offices. BB also instructed the Banks and Finance Companies to set up Women Entrepreneurs Dedicated Desk in all branches.

Ref: SMESPD Circular-1 dated: February 08, 2015.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/feb082015smespd01.pdf

2. Incentive facility against loans & advances provided to women entrepreneurs

To encourage timely adjustment/receipt/repayment of loans/investments given to women entrepreneurs by Banks/Finance Companies Bangladesh Bank has formed a fund for “Cash Incentive Facility against Disbursed Loan/Investment to Women Entrepreneurs in CMSME Sector”.1% incentive is being provided to the women entrepreneurs who repaid the CMSME loans within stipulated time and 1% to the concern Bank/Finance Company from the said fund.

Ref: SMESPD Circular No.-8 dated: August 17, 2021.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/aug172021smespd08.pdf

3. Identifying, imparting training and providing loans to new women entrepreneurs

To extend credit facilities to new women entrepreneurs’, instruction has been given to all Banks and Finance Companies to find out at least three women entrepreneurs within the catchment area of all branches for imparting training to extend credit facilities to minimum one of those training receivers.

Ref: SMESPD Circular No.-2 dated: April 08, 2015.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/apr092015smespd02.pdf

4. Determination of funding cap for women's initiatives

According to theSME financingpolicy of BB, Banks and Finance Companies must provide 10% of their total CMSME loan portfolio to the women entrepreneurs and the percentage will have to be raised at least 15% by 2024.

Ref: SMESPD Circular No.-2 dated: September 05, 2019.

Circular Link:

https://www.bb.org.bd/mediaroom/circulars/smespd/sep052019smespd02.pdf

5. Definition of Women Entrepreneur

According to the SME financing policy of BB, if a woman is the owner of a privately owned or proprietary firm or owns at least 51% share of a partnership firm or a private company registered with RJSC, then she will be considered as a woman entrepreneur and the enterprise will be considered as a women enterprise.

Ref: SMESPD Circular No.-2 dated: September 05, 2019

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/sep052019smespd02.pdf

6. Dedicated Refinance Scheme for Women

Bangladesh Bank launched a refinancing fund of BDT 3000 crore named “Small Enterprise Refinance Scheme for Women Entrepreneurs”to increase financing to women enterprises where PFI Level interest rate is 0.5% and Customer Level is no higher than 5%.

Ref: SMESPD Circular Letter No.-6 dated: June 25, 2023.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/jun252023smespdl06.pdf

7. Priority of women in refinance schemes

(a) BB has introduced a Refinance Scheme of BDT 3000.00 crore for the low income professionals, farmers and micro businessmen affected by Covid-19. Refinance from this fund is being disbursed through micro-finance institutions. 25% of this fund has been reserved for Women.Customer level interest rate is 9% (Till June 2023).

Ref: FID Circular No.-1 dated: April 20, 2020; FID Circular Letter-1 dated: June 08, 2021

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/jun252023smespdl06.pdf

https://www.bb.org.bd/mediaroom/circulars/finincld/jun092021fidl01e.pdf

(b) A refinance scheme of BDT 500 crore has been formed for no-frill account holders.Women will get preference in getting loan from this fund. PFI Level interest rate is 1% and Customer Level interest rate is not more than 7%.

Ref: FID Circular No.-1 dated: September 05, 2021

Circular Link: https://www.bb.org.bd/mediaroom/circulars/finincld/sep052021fid01.pdf

(c) BB also decided to provide 10% of the loan under “Refinance scheme of BDT 500 crore to create employment and to eliminate poverty for the people returned to the home due to Covid-19 pandemic and other reasons” to the women.PFI Level interest rate is 0.5% and Customer Level interest rate is no higher than 6%.

Ref: ACD Circular No.-1 dated: January 03, 2022.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/acd/jan032022acd01.pdf

(d) BB introduced USD 150 million Refinance Facility under ‘Supporting Post COVID-19 Small Scale Employment Creation Project (SPCSSECP)’ to Support CMSEs with the support of ADB. At least 20% of the qualified enterprises under the project have been reserved for women-led enterprises. PFI Level interest rate is 1.5% and Customer Level interest rate is no higher than 5.5%.

Ref: SMESPD Circular No.-2 dated: March 10, 2022.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/mar102022smespd02e.pdf

(e) BB has introduced refinancing scheme against financing to Cottage, Micro, Small and Medium Enterprises (CMSMEs) of BDT 25,000 Crore. Women will get preference in getting loan from this fund. PFI Level interest rate is 2% and Customer Level interest rate is no higher than 7%.

Ref: SMESPD Circular No.-4 [Paragraph 2.4 (b)] dated: July 19, 2022.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/jul192022smespd04.pdf

8. Reservation of quota for women of Credit Guarantee Fund

10% of the credit guarantee fund will be reserved for women entrepreneurs of the “Credit Guarantee Facility against Term Loan to CMSME Sector under Tk. 25,000 Crore Refinance Scheme”.

Ref: SMESPD Circular No.-3, dated: July 27, 2020; CGD Circular No.-2 dated: August 10, 2022.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/jul272020smespd03.pdf

https://www.bb.org.bd/mediaroom/circulars/cgd/aug102022cgd02.pdf

9. Provision of loan facilities without collateral

Banks and Finance Companies have been instructed to consider loan facilities up to BDT 25 lakhs without collateral by considering personal guarantee as an alternative security in providing loans to women entrepreneurs.

Ref: SMESPD Circular No.-4 (Paragraph-3.4), dated: July 14, 2015; SMESPD Circular Letter No.-1 dated: December 19, 2019.

Circular Link:

https://www.bb.org.bd/mediaroom/circulars/smespd/jul142015smespd04.pdf

https://www.bb.org.bd/mediaroom/circulars/smespd/dec192019smespdl01.pdf

10. Preference of women for cluster based financing

As per Cluster based financing policy of BB, women entrepreneurs under the cluster will be given preference.

Ref: SMESPD Circular No.-5 [Paragraph-5(g)], dated: August 14, 2022.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/aug142022smespd05.pdf

11. Preference of women in agricultural credit

BB has advised the Banks and Finance Companies to provide loans to rural women who involve in crop production, small-scale processing of agro-products and agro-related small businesses to improve their economic status. 

Ref: Agriculture and Rural Credit Policy 2022-2023.

Circular Link: https://www.bb.org.bd//pub/annual/acfid/agri_credit_policy2022-2023.pdf

12. Problem Solution Center

For complaints related to CMSME initiatives or women-led initiatives, the Financial Integrity and Customer Services Department (FICSD) of Bangladesh Bank handles grievances through telephone, email, and various digital platforms. Additionally, customer complaints or inquiries can be submitted and addressed via the 16236 hotline, ensuring timely resolution.

13. Simplified Loan Application Form in Bangla

BB introduced Simplified Loan Application Form in Bengla for CMSME entrepreneurs.

Ref: SMESPD Circular No.-2 dated: 25/09/2016.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/sep262016smespd02.pdf

14. Entrepreneurship Development Program

BB launched Entrepreneurship Development Program under SEIP (Skills for Employment Investment Program). At least 30% women will participate in this skill development program. 

15. Placing posters on the initiatives of BB

BB instructed Banks to place posters in bank branches to enhance awareness at the marginal level about various steps taken by Bangladesh Bank and benefits related to the CMSME sector.

Ref: SMESPD Circular No.-1 dated: 03/09/2023.

Circular Link: https://www.bb.org.bd/mediaroom/circulars/smespd/sep032023smespd01.pdf

16. Financial Literacy Guidelines

BB has formulated and circulated financial literacy guidelines for Banks and Non-Bank Financial Institutions. Special Focus has been given to increase women’s financial literacy in the Financial Literacy Guidelines. Women (Individual & Entrepreneur) are the tier-1 target group of these guidelines.

Ref: FID Circular No-01/2022, date 27 March 2022

Circular Link: https://www.bb.org.bd/mediaroom/circulars/finincld/mar272022fid01.pdf

17. Facilities for RMG workers

 BB has instructed Banks to extend No Frill Account opening facilities for RMG workers (mostly women) by depositing only 100 Tk. 

Ref: GBCSRD Circular No-05, 17 Sep 2013

Circular Link: https://www.bb.org.bd/mediaroom/circulars/gbcrd/sep172013gbcrd05.pdf