Barely afloat: COVID-19 and women entrepreneurs in Bangladesh

In early 2020, a young woman named Sabina Akhter took a step towards her dream of owning a small clothing store in the bustling town of Khulna in Bangladesh. At 28, like many young entrepreneurs in Bangladesh, Sabina hoped to turn her passion into a lucrative business and took out a loan to start her shop. Months later, as the COVID-19 pandemic hit Bangladesh and the country was on lockdown, Sabina was forced to shut down her fledgling business.

Like Sabina, Jahanara Begum, 47, an established entrepreneur, was also forced to close her business in 2020, leaving her with few options to support her children and extended family.

Sabina and Jahanara’s stories are emblematic of the many setbacks women entrepreneurs have experienced – in Bangladesh and beyond – during COVID-19.

Over the past decade, women have made huge strides in Bangladesh, leaving their homes to participate in the economy. In the small and medium-sized enterprises (SMEs) sector, which accounts for about 25 percent of Bangladesh’s GDP, women have made substantial contributions. SMEs create jobs for about 7.8 million people directly and provide livelihoods to 31.2 million people. However, women entrepreneurs face formidable obstacles, such as a lack of access to loans and start-up capital, difficulties in accessing formal support, and restrictions on their mobility and ability to network and develop their skills. companies. The prevailing social norms and practices in the home and in society also continue to pose barriers to their socio-economic empowerment.

The pandemic has exacerbated these challenges and revealed the few fallback options available to women entrepreneurs in times of crisis. In September 2020, The Asia Foundation commissioned a study examine the realities facing women entrepreneurs in South Asia. The study shows that a high percentage of female SME owners have experienced declining sales, massive layoffs of employees and major obstacles to operating their business due to insufficient cash flow and restrictions. government. More than 75% of respondents cited lack of funding as a challenge in adapting their businesses to COVID-19 restrictions.

Beyond the economic impact, women’s personal and family lives have also felt the impact of the pandemic. The Asia Foundation is working on a qualitative study of the economic and social impacts of COVID-19 in seven cities in South and Southeast Asia [forthcoming]. In Bangladesh, research focused on the social and economic impacts of COVID-19 on women-led SMEs in the city of Khulna, where I spoke to a number of women working in the garment industry. . Their stories told me about the many challenges they faced both professionally and personally.

The women spoke about the business impact of the lockdown and early containment measures, which caused them significant economic losses. The suspension of important social and religious events during the lockout triggered a ripple effect with negative consequences. Orders were canceled and stock piled up. Supply chains were disrupted and a shortage of raw materials in the local market after the lockdown forced many people to travel to other towns to stock up. Travel costs such as food and accommodation have resulted in increased business expenses. The need for inexpensive accommodation during these trips has raised concerns about personal safety.

My interviewees talked about making tough decisions like firing skilled workers. They spoke of the years it takes to develop skills and trusting relationships with their employees and the emotional stress this has caused, which further reduces productivity. All of these factors have taken their toll, and while some women still struggle to keep their businesses alive, others have been forced to shut down.

In April 2020, the government of Bangladesh introduced a stimulus program the equivalent of about A $ 3.1 million to boost the SME and cottage industry sector, but the program has attracted few takers. The women we spoke to were hesitant about the repayment terms and the many documents required. Longer and tailor-made repayment terms are necessary. Many women could also benefit from training in business management, digital literacy and other new skills to help them rebuild their businesses as the pandemic abates.

Women also faced personal challenges during this time. In the absence of domestic help, women took on additional family and household responsibilities, taking time away from their businesses. With schools closed and children at home, many reported spending significantly more time looking after children, forcing them to work late nights at their businesses after completing household chores. To cope, some women have moved their businesses to their homes, and others, usually younger, are turning to digital platforms. Both are desperately looking for new ways to stay engaged in the economy.

All of these factors increased the stress and anxiety of women. At the same time, the loss of social ties left them with fewer coping mechanisms. Many would benefit from psychosocial support to help them pursue their dreams.

Despite these many obstacles, women entrepreneurs are trying to find a place for themselves in the business sector and more broadly as contributors to the economy of Bangladesh. But this space is still terribly small. According to a 2016 study by the International Finance Corporation, women-owned businesses account for only 7.2 percent of the eight million businesses in Bangladesh.

To increase this number and enable more women to conduct successful business activities, policies and programs must remove the barriers that prevent women like Sabina and Jahanara from starting their businesses, barriers that have become more intimidating during COVID-19. .

This article is part of a collaborative series with The Asia Foundation.