Training sans loan creating few women entrepreneurs

Kamrun Nahar's start in the batik and screenprinting business was small and showed signs of a lot of potentials, but her outlet in Dhaka's Rampura could not grow much as the young entrepreneur had training but not enough cash – nor did she get a loan.

The training in the second phase of the Urban Based Marginal Women Development Project of the Jatiyo Mohila Sangstha in 2019 translated into a small firm named "Revive Fashion", which has often brought her a turnover to the tune of Tk1 lakh, sometimes even more than that, in some months.

"Some financial assistance or loans could definitely help my venture scale up," Kamrun Nahar told The Business Standard.

She said she had approached the Jatiyo Mohila Sangstha for a loan but got no response.

Many women, having the potential to become successful entrepreneurs, who obtained training in different trades under the second phase of the Urban Based Marginal Women Development Project, are not able to utilise their training properly because of a lack of access to loan facilities, Kamrun Nahar pointed out, adding those who have started small businesses with their small savings or family support are finding it difficult to stay afloat.

People concerned said the National Mohila Sangstha previously used to provide the trainees with loans but the facility is suspended now. They think the trained women could have emerged as small entrepreneurs at the grassroots level, had they been given loan assistance at the end of the training.

An analysis of information about the 42,350 women, thus far trained in the second phase (July 2016-June 2022) of the project, shows that a paltry 3.6% of the trainees could emerge as entrepreneurs. The authorities have set a target to train 51,600 women in this phase.

The Mohila Sangstha also conducted a survey on 750 women entrepreneurs who were trained in the ongoing phase of the project. Some 98% of the respondents opined that there should be a loan facility at the end of the training.

Amid a situation when the marginal women, trained under the project, are demanding loan assistance, the Mohila Sangstha has taken up an initiative to train 1,87,500 women in various trades in the third phase of the project, extending from July 2022 to June 2027.

To this end, the cost for training purposes has been estimated at Tk432 crore but no allocation has been considered for loan facilities.

Sakeun Nahar Begum, executive director of Jatiyo Mohila Sangstha, told TBS that they provided the trainees with loan facilities until 2008, but that experience of loan recovery was not pleasant towards the end. On the other hand, unlike in the past, the opportunity for women entrepreneurs to take out loans from the banking sector has increased.

Because of all these reasons, disbursement of loans under the Urban Based Marginal Women Development Project was stopped, she mentioned.

According to official sources, the Jatiyo Mohila Sangstha launched the training programme for urban women in 1993. At that time the project was named "Urban Based Women Development Project". In three phases of the project until 2008, urban women were provided with credit facilities alongside training. The training was given in 10 different trades.

In the first phase (1993-1996) of the project, 3,000 women were trained and two-thirds of them obtained a total of Tk1 crore in loans. There was an opportunity to repay the loan in 18 instalments with a grace period of three months. As all the borrowers did well in business, 100% of the loan was recovered.

In the second phase (1996-2003), 19,400 women were trained and 5,000 of them were given Tk3.4 crore in loans. The loan recovery rate was 100%.

In the third phase, training was imparted on 20,200 women while 2,072 of them were given Tk3.09 crore in loans. But this time, only 70% of the loans could be recovered, prompting the authorities to scrap the loan facilities under the project.

Officials concerned, however, said 100% of the loans could not be recovered due to some weaknesses in the monitoring activities at that time.

In 2008, the word "marginal" was added to the project title while the number of trades remained the same, with no provision for loans for the trainees.

'Focus should be on making skilled workforce'

Ahsan H Mansur, executive director at the Policy Research Institute, said there was also an opportunity to take these marginal women to cooperative-based production. This can lead to the production of quality goods, he added.

He, therefore, stressed the need for changing the way of financing.

The noted economist also called for emphasising up-skilling the marginal women instead of making them entrepreneurs.

"If they have skills, they will get employment in readymade garment or other sectors. Our industry lacks skilled workers. The authorities should communicate with the industrial organisations and arrange training programmes according to their needs. This will create employment opportunities."

Tk22,885 average monthly income

According to a survey conducted on entrepreneurs trained in the second phase of the Urban Based Marginal Women Development Project, the average monthly family income of entrepreneurs has increased to Tk22,885. Some 40% of the entrepreneurs have seen their family income rise to Tk15,001-20,000 while the increase is Tk25,001-30,000 for 31% others, the survey finds.

The survey also finds that 58% of women who have become entrepreneurs after partaking in the training were previously housewives, while 21.9% were unemployed.

Marketing a major challenge

The women entrepreneurs told TBS that there are several problems in marketing their products and transportation is a major one among them. They also face big challenges with regard to packaging.

The entrepreneurs suggested a number of measures to resolve the problems associated with the marketing of their products.

Among the respondents, 95.6% demanded that fairs be arranged regularly while 71% said their problems would be alleviated if they get support in packaging and transportation.

Inclusion of 7 new trades

In the third phase of the Urban Based Marginal Women Development Project, training will be imparted in a total of 17 trades. Alongside in the existing 10 trades, including block batik and screen printing, sewing, embroidery and nakshi kantha, making soap, weaving, binding and packaging, pearl and mussel show piece making, candles and show pieces, beautification, food processing, leather goods making, poultry, catering, and mobile servicing, training will on seven more trades, based on the feedback of the trainees.

The new trades include nursery, mushroom and organic farming, driving, caregiving, housekeeping and Hotel management, and making products with bamboo, cane and jute.

Officials concerned said of the existing 10 trades, block batik and screen-printing was the most-chosen subject, followed by sewing and embroidery, making candles-soaps and showpieces, nakshi kantha, and cutting.

Accordingly, the highest numbers of entrepreneurs have been created in block batik and screen printing, sewing and embroidery, and soap, candle and showpiece making industries, respectively.

Meanwhile, despite the increase in the number of trades, training will be given for four months on each trade as before. The trainees will also be given an allowance of Tk150 per class.