For women entrepreneurs in Bangladesh, getting a bank loan can mean confronting more than interest rates, paperwork, and eligibility requirements. The lending process does not simply involve bank officers and women in the SME sector.
A businesswoman seeking loans may also have to navigate a system shaped by assumptions about who belongs in business, who can handle financial matters, and who deserves to be taken seriously by government officers and other people involved in the lending process.
Although there is growing attention to facilitating women in funding their ventures in this country, gendered attitudes can make the loan application process a difficult and discouraging experience.
The case of guarantors for bank loans can illustrate the difficulty women face in accessing external funds for their small or medium businesses. Generally, loan applications require guarantors who satisfy particular conditions, such as being established businesspeople, government employees, or property owners.
When lending practices favour or expect male guarantors, women entrepreneurs may have difficulty identifying people within their professional and social networks who meet these requirements.
Women have had fewer opportunities to develop relationships with senior businesspeople, property owners, or officials due to their extensive workload at home and work or the patriarchal norms of having a distance from males in society.
Consequently, women entrepreneurs may have a smaller pool of people who can meet the bank's requirements or even struggle to find any of them.
The problem goes beyond the availability of potential guarantors. It can also reflect perceptions about women's credibility as business owners.
Given the gender stereotypical attitude, some potential guarantors may be reluctant to assume responsibility for a woman's business loan. Concerns about the legitimacy, stability, or financial prospects of a woman-owned business can make an already demanding requirement even more difficult to fulfil.
The collateral for bank loans is another powerful example to consider. As women in our society lack property, the collateral issue has received certain attention in the lending process.
While women have flexibility regarding collateral in applying for small amounts of loans, the case is complicated for seeking large loans. The problem is not restricted to simply not possessing property; it can be extended to providing necessary documents in banks to place collateral.
Obtaining these documents can involve interaction with land registration offices and other public institutions. Women may find themselves waiting longer, having difficulty obtaining assistance or feeling that their concerns are not taken as seriously as those of male applicants.
The issue is not necessarily that men receive uniformly favourable treatment. However, gender can add another layer of disadvantage for women when social expectations define business dealings, negotiation, and interaction with public officials as predominantly male activities.
Gender discrimination can take the form of subtle neglect, dismissive behaviour or an assumption that a woman is less capable of handling business-related matters independently.
This creates an additional burden for women seeking finance. A procedure that should be purely administrative can become an uncomfortable social encounter.
When women anticipate such treatment, some may become reluctant to approach public offices independently, thereby making the loan application process more complicated and time-consuming.
In short, when women encounter gender-biased attitudes during these processes, access to finance can become dependent not only on their business credentials but also on their ability to navigate gendered institutional environments.
As a result of such gendered problems, some women may seek smaller loans than they actually require, postpone expansion plans, rely on informal financing or avoid borrowing altogether.
Such outcomes matter not only for individual women entrepreneurs but also for the wider economy. When women-owned businesses cannot obtain adequate finance, opportunities for business expansion, employment creation, and income generation can also be constrained.
Improving women's access to credit therefore requires attention not only to the availability of financial products but also to the conditions under which those products are accessed.
Ensuring that women entrepreneurs can access formal finance requires removing not only the visible barriers written into loan procedures but also the less visible barriers created by social attitudes and institutional practices.
Banks need to design the lending process more critically to address the patriarchal problems associated with it. For instance, requirements concerning guarantors deserve careful consideration. Banks can examine whether particular requirements unintentionally disadvantage women entrepreneurs and whether alternative mechanisms can assess creditworthiness without unnecessarily restricting access to finance.
It is also important to take into account the social and institutional environment surrounding the lending process, which is not directly related to banks.
Public-sector employees need greater awareness of gender-sensitive service delivery. Women applicants should be treated consistently and respectfully, while procedures for documentation and communication should be sufficiently transparent that applicants do not have to depend on informal influence or personal connections.
Women's access to bank loans is not simply a question of whether a loan facility exists. It is also a question of whether women can enter the lending process on equal terms. In a deeply patriarchal society, dismantling the gendered obstacles will not be straightforward. Government agencies and financial institutions therefore need to work together to make lending practices more accessible, transparent, and responsive to women entrepreneurs.
Dr Jasmine Jaim is a Professor at Institute of Business Administration, Jahangirnagar University. She is an Associate Editor of the international journal Gender, Work and Organization, and social entrepreneur in the creative industry. The article has been developed based on the journal article “Bank loans access for women business-owners in Bangladesh: Obstacles and dependence on husbands” published in “Journal of Small Business Management.”