Micro Credit Operations and Women Entrepreneurship Development in Bangladesh : A Study of Grameen Bank

Abstract

Rural women constitute about 90 percent of total female population who remain as yet significantly untapped human resources (UNDP. Dhaka, 1989). In any country, the role of women in socio-economic development is immense. Many rural women in the developing countries need to work in order to survive but the rural wage-market and society are not prepared for them. ((Moslehuddin and Kibria 1987). In developed countries, women have participated in all spheres of socio-economic development and brought about the instant development. Comparatively, women of Bangladesh are far behind which is undoubtlly an impediment to our total development. After independence, Bangladesh government has taken various welfare programs with a large number of grant and subsidies to improve the women entrepreneurs but these programs have not been fully successful in meeting their objectives. The common features of these programs were based on foreign aid and subsidy. These programs were not sustainable and perpetual. Extensive programs were taken during the Third Five Year Plan (1985-90) and Fourth Five Year Plan (1990-95) to ensure mass women participation by involving them into the mainstream of development through departments of women affairs. However, it has not reached the whole of the country, especially poor rural women. Economic development of a country is largely dependent on the existence and growth of ent1 perineurial class in that country (Rahman, 1995:67). The role of entrepreneur in the industrial development of a country is well recognized. Mostly male entrepreneurs have played this role over the past centuries. Women's participation in business was conspicuously insignificant for a very long period. The women entrepreneurs have shown great enthusiasm to evolve into entrepreneurship, but retreated from the field on account of multiplicity of problems faced in leading the project to the final stage of production and continue commercial operation. As a result, many enthusiastic women entrepreneurs could not develop themselves as stable one due to lack of needed promotional assistance. The promotional agencies do not appear to have given adequate promotional support to the women entrepreneurs especially the rural poor women entrepreneurs due to lack of adequate collateral. The potentialities are great for poor women entrepreneurs. Appropriate opportunities, congenial environment and collateral free credit assistance can only prove how rapidly such potentialities can be converted into the realities of developing poor women entrepreneurs. A large portion of the rural program women have benefited significantly from participation in the micro-credit programs of Bangladesh (Choudhury, 2001 & 2002: 28). Collateral free micro credit operations will be the appropriate key to the success of the poor women entrepreneurs at the grass-root level. Moreover, the micro credit approach may be one of the effective ways to reduce the difficulties of small business women entrepreneurs. As a pioneer bank Grameen Bank has created a number of local revolving collateral free loan funds that extend credit to women entrepreneurs in low-income communities. The Grameen Bank credit programs have substantially improved the socio-economic conditions of its borrowers (Hossain, 1999: 78). The Grameen Bank has been lending micro enterprise loan for the first moving members, especially the business run by women entrepreneurs. Grameen Bank has been running various operations throughout the country through a set of well-defined guidelines with special reference to the objectives, assessments of credit needs and rate of interest, repayment period, security, and so on. The present study is an attempt to evaluate the development of women entrepreneurship through micro credit operations by Grameen Bank. 1.2 Rationale of the study Entrepreneur is an important agent of economic development of a developing country like Bangladesh. Women entrepreneurship development has recently gained considerable importance in the government policy making (Mohiuddin, Moniruzzaman and Mahmood, 1998: 47). Interest in women entrepreneurs as research subjects has developed very recently. Part of this interest is due to the tremendous growth in small business start-ups by females. The other major reasons for the interest arise from the assumption that women entrepreneurs encounter difficulties in starting and operating business which are different from those faced by male (Naider: 1987). In Bangladesh, there is a growing interest in the subject of women entrepreneurship in the wake of rapid socio-economic change.