452 Conference Proceedings-2025

Conference Proceedings-2025

Towards Gender Equality: Assessing CMSME Financing Impact on

Women Entrepreneurs in Bangladesh
SADIKA AKTER1; DR. MD. ABDUL LATIF2; SHIRIN SULTANA3; CHANDAN KUMAR ROY4
ANWAR HOSSAIN CHOWDHURY5

Abstract: This study evaluates the impact of initiatives by Bangladesh Bank aimed at improving financial access for
Cottage, Micro, Small, and Medium Enterprises (CMSMEs), with a particular focus on Women-owned CMSMEs
(WCMSMEs). Despite various policy efforts, research on their effectiveness in bridging the gender gap remains
limited. Utilizing both qualitative and quantitative methods, this study analyzes data from the SME portal and the
Credit Guarantee Department of Bangladesh Bank, alongside survey data and a linear probability model to
investigate factors influencing women's access to finance and gender equality. Findings from a structured survey of
42 WCMSMEs reveal that CMSME financing has a positive impact on gender equality and family well-being,
empowering women entrepreneurs in decision-making and enhancing their families' socio-economic status. Key
challenges identified include a lack of collateral, limited commitment from banks, high funding costs, and insufficient
women-focused financing facilities. Statistical analysis corroborates these qualitative insights, demonstrating that
flexible terms, shorter loan approval times, and specialized training significantly enhance women's decision-making
capacity, which is crucial for reducing the gender gap. The study further examines the introduction of a credit
guarantee facility in 2020, which allocated a 10% quota for WCMSMEs. Analysis indicates that women's participation
in the scheme averaged 10.05% from 2020 to 2022, with a notable increase in financing for new enterprises.
Following the introduction of the scheme, 38% more WCMSMEs received loans, and loan disbursement for
WCMSMEs increased by 18%, highlighting the pro-gender effect of the credit guarantee scheme. Overall, the findings
suggest that targeted financial initiatives can significantly enhance women's access to finance and contribute to
advancing gender equality within Bangladesh's CMSME sector.

1.0 Introduction
Since its independence in 1971, Bangladesh has significantly advanced toward sustainable development, with a
population nearing 174 million, over half of whom are women. Women entrepreneurs play a crucial role in
economic growth, job creation, and innovation. Despite this potential, they face numerous challenges, including
systemic barriers, cultural norms, and limited access to financing. Article 28(2) of the Constitution highlights
women's equal rights, reflecting the nation's commitment to gender equality and empowerment (Ministry of
Law, Justice and Parliamentary Affairs, Bangladesh, 2019). This commitment is further supported by
frameworks like the Sustainable Development Goals (SDGs), the Eighth Five-Year Plan (2020-2025), and the
National Industrial Policy 2022, which focus on combating discrimination, ensuring equal decision-making

1 Additional Director, Bangladesh Bank

2 Research Associate, Bangladesh Institute of Governance and Management (BIGM)
3 Research Associate, Bangladesh Institute of Governance and Management (BIGM)
4 Joint Director, Bangladesh Bank
5 Assistant Professor, Bangladesh Institute of Governance and Management (BIGM)
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 453

participation, and enhancing women's access to resources and opportunities. Vision 2041 and the Delta Plan
2100 also emphasize women's empowerment in national development.
Bangladesh's Micro, Small, and Medium Enterprises (MSMEs) sector offers a unique environment to explore
gender and entrepreneurship. With increased access to business support services and financing, including
support to develop innovative business models, microenterprises have the potential to make a much bigger
contribution to reducing the number of working poor in Bangladesh (ILO, 2023). The country has improved
women's workforce participation. The Bangladesh Bank (BB) supports inclusive economic growth and gender
equality through the Cottage, Micro, Small, and Medium Enterprises (CMSMEs) sector, aiming for substantial
employment growth and increased women's economic participation, which is vital for becoming an upper-
middle-income country by 2031. Nonetheless, women entrepreneurs face significant hurdles, particularly in
securing financing. Studies reveal that women-owned businesses receive less financial support than those owned
by men, hampering their growth and the nation's economic development (Bari, S. et al. 2023; Shohel, T. et al.
2021; Shoma, C. 2021; Jaim, J. 2020). The CMSME sector significantly contributes to Bangladesh's GDP (Hafiz,
N. et al. 2021). Therefore, both the Government and BB prioritize developing CMSMEs to stimulate economic
growth and reduce income inequality.
CMSME financing for women includes tailored financial support for those starting or running businesses in this
sector. Acknowledging the unique challenges women face in accessing finance, BB has prioritized CMSMEs.
The SME and Special Programmes Department (SME&SPD), established in 2009 under BB, focuses on
enhancing the banking environment for women entrepreneurs. Targeted lending for CMSMEs, recognized as a
best practice by the Alliance for Financial Inclusion (AFI) in 2014, has been introduced. BB continues to offer
varied policy support for women entrepreneurs. However, challenges in securing funding persist, hindering
women's full participation in entrepreneurship. Ensuring adequate financial support for CMSME women is
essential for closing the gender gap and achieving Bangladesh's goal of upper-middle-income status by 2031.
Multiple ministries, divisions and agencies in Bangladesh contribute to CMSME development through various
policies and programs, with the Ministry of Industry being the primary agency. The SME Foundation and BSCIS
are also active in implementing CMSME initiatives. The Central Bank of Bangladesh (BB) plays a crucial role
in facilitating funding for the CMSME sector via banks and financial institutions, focusing particularly on
women entrepreneurs. This policy paper aims to analyze BB's credit policies and programs designed for
CMSME financing to women entrepreneurs, with findings that could guide the formulation of more effective
credit policies aligned with the Sustainable Development Goals (SDGs) and Vision 2041.
This study is motivated by the pressing need to evaluate the impact of financial initiatives on women
entrepreneurs within the CMSME sector in Bangladesh. Understanding how access to finance affects the success
and sustainability of women-owned businesses is vital for creating effective policies that advance gender
equality in entrepreneurship.
The research aims to bridge the knowledge gap by investigating the relationship between CMSME financing
and its effects on women entrepreneurs. By analyzing the experiences of women who have accessed CMSME
funding, the study will identify key success factors and ongoing challenges. Additionally, it seeks to provide
actionable recommendations for policymakers, financial institutions, and support organizations to enhance
financing programs for women entrepreneurs.
The goal of the policy paper is to identify ways to ensure gender equality and sustainable economic development
by improving financial support for women entrepreneurs, in line with the SDGs and Vision 2041. The specific
objectives include:
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a) To explore the outcome of the existing credit policies and programs taken by BB to ensure access to
CMSME financing for women entrepreneurs.
b) To identify the challenges faced by women entrepreneurs in accessing CMSME financing.
c) To suggest recommendations to increase the flow of CMSME financing for women entrepreneurs.
Following the Introduction in Section 1, which outlines the purpose, background, and rationale, Section 2 will
present a literature review, Section 3 will establish a theoretical and conceptual framework, and Section 4 will
detail the materials and methods. Section 5 will conclude with findings and a comprehensive discussion, while
Section 6 will address policy implications.
2.0 Review of Literature
The literature on women entrepreneurship in Bangladesh reveals a complex landscape characterized by
significant challenges and opportunities. This review synthesizes key findings from various studies, highlighting
the barriers women entrepreneurs face in accessing financing and the implications for gender equality and
economic development.
Parvin et al. (2012) identify critical challenges such as limited access to credit, inadequate market information,
and bureaucratic complexities that hinder women entrepreneurs. While government policies and support from
financial institutions have been noted as potential mitigators of these obstacles, the reliance on existing literature
may not provide sufficient empirical evidence to substantiate these claims. This gap underscores the need for
original data to strengthen the findings and offer a more nuanced understanding of the current landscape.
Shoma (2019) emphasizes that access to finance remains the most significant challenge for women in starting
and operating CMSMEs in Bangladesh. The study highlights a pronounced gender gap in access to formal credit,
which adversely affects the growth and development of women-owned businesses. However, the reliance on
secondary data, including a case study from 2009, limits the originality and depth of the findings. The study
predominantly employs qualitative methods, such as questionnaire surveys and interviews, without integrating
quantitative analysis, suggesting that a mixed-methods approach could yield a more comprehensive
understanding of the issues at hand.
Yunus et al. (2022) further explore the challenges faced by women entrepreneurs, noting that lower initial capital
and limited financial support compared to their male counterparts hinder business growth. They identify access
to finance, legal constraints, and entrepreneurial skills as significant factors influencing women's participation
in entrepreneurship. However, the study's heavy reliance on existing literature may restrict the originality of its
insights, and it lacks a robust theoretical framework to analyze the complexities of gender relations in
entrepreneurship.
Jaim (2021) employs qualitative research methods to reveal that women business owners face gender-specific
obstacles, often relying on their husbands for loan applications. This dependence highlights the need for targeted
policy recommendations to support women's entrepreneurial ventures. However, the study lacks comparative
analysis, failing to contrast the experiences of women who depend on their husbands with those who do not,
which limits the understanding of the full spectrum of women's experiences in accessing debt finance.
Zhu et al. (2021) also address the influence of access to finance, legal constraints, and entrepreneurial skills on
female entrepreneurship, noting that self-leadership behavior plays a mediating role. Their methodology focuses
solely on quantitative data collection, which may overlook the rich, contextual insights that qualitative methods
could provide. Additionally, the appropriateness of the indicators used to measure constructs such as access to
finance and legal constraints is not thoroughly justified in the context of Bangladeshi women entrepreneurs.
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 455

Shohel et al. (2021) draw upon gender socialization and gender performance theory to argue that microfinance
programs in Bangladesh have not effectively shifted gender norms or increased women's financial
empowerment. They note that loans are often controlled by men due to persistent patriarchal norms. However,
the study may not sufficiently explore other contextual factors, such as cultural, economic, and political
influences, that could affect women's financial empowerment.
Bialus et al. (2022) highlight significant gaps in gender-disaggregated data among surveyed banks, noting that
only a few institutions regularly collect this data. This lack of comprehensive data limits the reliability of findings
regarding the financial services accessed by Women-Owned Small and Medium-Sized Enterprises (WSMEs).
The study suggests that financial institutions can improve access to finance for women-owned SMEs by
requiring gender-disaggregated data reporting and tailoring products and services to meet their needs.
Using qualitative narrative analysis, Bari et al. (2023) find that women entrepreneurs in Khulna City face barriers
in accessing market and financial support. They emphasize the need for improved government and non-
governmental support to ensure equal participation in the marketplace. However, the study's reliance on
secondary literature limits its ability to provide a comprehensive understanding of the current challenges faced
by Women-Owned Small Businesses (WOSB) in Bangladesh. The lack of primary data collection restricts the
depth of insights and may overlook recent developments in the entrepreneurial landscape.
Hafiz et al. (2021) argue that urban economies in Bangladesh can promote the growth of women-owned small
businesses by addressing issues such as financial illiteracy, inadequate human capital, and social capital.
However, their reliance on secondary literature may not capture the most current challenges and dynamics faced
by WOSB, further emphasizing the need for primary data collection.
Afroze et al. (2015) identify challenges such as inadequate capital, gender discrimination, and lack of knowledge
faced by women entrepreneurs. While the study highlights personal qualities and support from spouses or family
as factors that help overcome these obstacles, it does not delve deeply into gender-specific barriers, such as
cultural norms and societal expectations. Additionally, the study lacks detailed policy recommendations or
actionable steps for stakeholders, which could enhance its practical relevance.
The existing literature underscores the multifaceted challenges faced by women entrepreneurs in Bangladesh,
particularly in accessing financing. While various studies provide valuable insights, there is a notable reliance
on secondary data and a lack of primary research that could offer fresh perspectives. Future research should aim
to incorporate mixed-methods approaches, comparative analyses, and robust theoretical frameworks to deepen
the understanding of the barriers women entrepreneurs face and to inform effective policy recommendations.
3.0 Theoretical and Conceptual Framework
This study is framed by the Gender Equality and Empowerment Theory, which underscores the importance of
women's empowerment and equal participation in economic activities. This theory posits that gender equality is
a fundamental human right and a prerequisite for sustainable development (UN Women, 2018). Women are
often recognized as the most disempowered members of marginalized groups, making the term "women's
empowerment" synonymous with their struggle for social justice and equality (Batliwala, S. 1993).
Understanding Gender as a Social Construct and Its Empowerment
Gender is understood as a social and cultural construct that delineates the roles and responsibilities of men and
women, as well as girls and boys (Dhuli, B., et al., 2023; UNICEF, 2017). When gender equality is addressed
as a distinct policy issue, the focus shifts from merely representing women as an underrepresented group to
examining the broader gender structures at play. Gender equality entails that women and men, girls and boys,
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have equal conditions, treatment, and opportunities to realize their full potential, human rights, and dignity. It
also emphasizes their ability to contribute to and benefit from economic, social, cultural, and political
development.
Empowerment is defined as the capacity to participate in the economic and political structures of society and to
contribute to decision-making processes (Rowlands, 1997). Stein (1997) describes empowerment as a social
action process that encourages individuals, organizations, and communities to gain control over their lives within
their communities and larger societies. Consequently, women's empowerment enables women to realize their
full identity and potential across all spheres of life (Sahay, 1998).
Conceptual Framework for CMSME Financing and Gender Equality
The conceptual framework for this study illustrates the relationship between CMSME financing, women's
empowerment, and gender equality. It highlights the key factors influencing women's access to finance and the
resulting impacts on their decision-making power and socio-economic status. The framework is structured as
follows:
a) CMSME Financing Initiatives: This includes targeted financial products, credit guarantee schemes, and
supportive banking policies aimed at enhancing women's access to finance.
b) Empowerment Mechanisms: These mechanisms encompass training programs, awareness campaigns,
and tailored financial solutions that equip women entrepreneurs with the necessary skills and knowledge
to navigate the financial landscape.
c) Outcomes: The expected outcomes of effective CMSME financing and empowerment mechanisms
include increased participation of women in family decision-making, improved socio-economic status of
families, and enhanced community development.
d) Barriers: The framework also acknowledges the barriers women face in accessing finance, such as high-
interest rates, lack of collateral, and restrictive lending criteria, which can hinder their empowerment and
perpetuate gender inequality.
Moreover, gender equality involves recognizing the diverse interests, needs, and priorities of all genders,
ensuring that every individual can develop their personal abilities and make choices free from the constraints of
stereotypes and prejudices regarding gender roles (UNICEF, 2017). Alexander and Welzel (2007) identify four
central aspects of gender equality: i) equality in basic living conditions, ii) equality in civic actions, iii) positional
empowerment, and iv) political representation.
Below is a conceptual framework diagram that visually represents the relationships outlined above. The arrows
indicate the direction of influence, demonstrating how CMSME financing initiatives lead to empowerment
mechanisms, which in turn result in positive outcomes for women and their families, while also highlighting the
barriers that need to be addressed.
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 457

Figure 1: Conceptual Framework Diagram

4.0 Materials and Methods

This policy paper employs a mixed-methods approach, utilizing both primary and secondary data to evaluate
the impact of Cottage, Micro, Small, and Medium Enterprises (CMSME) financing on women entrepreneurs
and gender equality in Bangladesh.
Primary Data Collection:
A questionnaire survey was conducted with women-owned businesses, yielding 42 responses. The survey aimed
to identify key issues, root causes, and effects of CMSME funding on women entrepreneurs and to gather
recommendations for overcoming challenges. Additionally, seven Key Informant Interviews (KIIs) were
conducted with experts from development organizations, including the International Finance Corporation (IFC),
IDLC Finance PLC, and the Bangladesh Women Chamber of Commerce and Industry (BWCCI), as well as
officials from various departments of Bangladesh Bank. A Focus Group Discussion (FGD) involving
representatives from the SME and Special Programs Department of Bangladesh Bank, women entrepreneurs,
and bank representatives was also conducted to identify policy gaps and formulate policy recommendations.
To analyze the broader influences on CMSME financing for women entrepreneurs, a PESTEL (Political,
Economic, Social, Technological, Environmental, and Legal) analysis was performed. Additionally, a SWOT
(Strengths, Weaknesses, Opportunities, and Threats) analysis was conducted to assess the internal and external
factors affecting women entrepreneurs in the CMSME sector.
Secondary Data Sources:
Secondary data was sourced from the Bangladesh Bank, Bangladesh Bureau of Statistics (BBS), SME
Foundation, World Bank Enterprise Survey, and the Asian Development Bank (ADB).
Methods:
Quantitative data analysis was carried out using linear probability and probit models to identify causative factors
and assess the effectiveness of CMSME financing policies in encouraging gender equality. The dependent
variable is defined as the respondent's support for women's participation in family decision-making, indicated
by scores of 4 (Agree) or 5 (Strongly Agree) on a Likert scale, with lower scores indicating otherwise.
Independent variables include factors such as the logarithm of the total number of female employees, business
experience, educational attainment, barriers to financing (e.g., lack of collateral, non-cooperation from financial
institutions, high interest rates, excessive documentation), and the availability of women-focused financing and
training facilities.
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Furthermore, a Likert scale analysis assessed respondents' perceptions and attitudes towards CMSME funding
and gender equality, enabling a comprehensive evaluation of the impact of CMSME financing programs on
gender equality and women's socio-economic participation.
5.0 Findings, Discussion and Conclusion
Analyzing the gender participation ratios year by year provides crucial insights into trends and disparities in men
and women’s participation in CMSME financing and can serve as a valuable foundation for policymaking and
initiatives aimed at narrowing the gender gap and promoting greater women engagement. The Women's
Participation Ratio represents the proportion of women's participation relative to the participation of both men
and women.
Figure 2: Women's Participation Ratio in CMSME Financing

Women's Participation Ratio

7
6
5
4
3
2
1
0

While there has been notable progress in allocating funds within the CMSME sector, particularly exceeding the
CMSME loan portfolio target, there is still a substantial shortfall in providing loans to women-owned CMSMEs.
The data reveals (Table 4.2) a mixed picture of achievements in gender equality within the CMSME sector. The
table shows the achievements in December 2021, December 2022, and June 2023 in the context of gender
equality within the CMSME sector.

Table 1: Achievement status in gender equality within the CMSME sector

Achievement Achievement Achievement
Achieved target on CMSME Sector Target
(June 2023) (Dec, 2022) (Dec, 2021)
Size of CMSME loan portfolio of total loan 24% 19.59% 18.46% 18.63%
portfolio (2023)
Size of CMS loan portfolio of total loan 50% 67.71% 68.57% 66.59%
CMSME loan portfolio (2024)
Loan size for women owned CMSMEs of 15% 5.96% 5.67% 4.08%
total loan portfolio (2024)
The CMSME loan portfolio as a percentage of the total loan portfolio has shown incremental growth over the
years, from 18.63% in December 2021 to 19.59% in June 2023. While there has been progress, it remains below
the 2023 target of 24%. However, the rate of progress needs to accelerate to meet the 2023 goal. The trend for
the CMSME loan portfolio shows a gradual increase over time, indicating some progress toward the target.
The allocation of loans to CMS within the CMSME sector is exceeding the target, suggesting that overall support
for micro and small enterprises is strong. However, this doesn't specifically address gender equality unless
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 459

women-owned CMSMEs are a significant part of this category. Lastly, the allocation of loans to women-owned
CMSMEs, as a percentage of the total loan portfolio, is significantly below the 2024 target of 15%. There has
been some progress, but the achievement in June 2023 remains at 5.96%. This underscores a persistent gap in
supporting women entrepreneurs within the CMSME sector and calls for focused interventions to reach the
target.
In order to better understand the overall context of women-owned CMSMEs in reducing finance gap,
stakeholder analysis, PESTEL analysis, SWOT Analysis, and Problem tree analysis has been done.
5.1 Findings
The PESTEL analysis provides a comprehensive view of the political, economic, social, technological, legal,
and environmental factors shaping CMSME financing for women entrepreneurs. These elements play a crucial
role in influencing the gender gap in financial access. Table 4.4 highlights the key factors and their impact on
women's entrepreneurship.
Table 2: PESTEL Analysis of CMSME Women Entrepreneur Financing
Factors Influence on CMSME Women Entrepreneur Financing
Political Government policies, political stability, and regulations shape financing access,
while corruption and tax policies impact implementation.
Economic Growth, income levels, interest rates, and inflation influence entrepreneurial
development, with income inequality posing challenges.
Social Demographics, education, cultural norms, and social barriers affect women’s
access to financial resources.
Technological Digital banking, automation, innovation, internet access, and tech awareness
enhance financing opportunities.
Legal Laws on employment, resource access, and institutional policies determine
financial inclusion for women.
Environmental Climate risks, regulations, and social risk management impact financing policies
and business sustainability.
SWOT Analysis
Table 4.5 outlines the key strengths, weaknesses, opportunities, and threats affecting women entrepreneurs in
the CMSME sector. This strategic analysis helps identify challenges and opportunities to bridge the gender gap
in CMSME financing and guide future policies.
Table 3: SWOT Analysis of Women Entrepreneurs in CMSMEs
Internal Factors External Factors
Strengths Opportunities
• Government and Bangladesh Bank • Tailored financial products (low-interest,
support. collateral-free loans).
• Educated, skilled women entering • Training, capacity building, and awareness
entrepreneurship. programs.
• Growing market demand for women-led • Digital financial services and global market
businesses. access.
• Financial institutions supporting women • ICT and social networking for business
entrepreneurs. expansion.
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Weaknesses Threats
• Limited access to formal finance, • Economic and political instability.
collateral issues.
• Socio-cultural barriers, gender bias in • Unequal access to technology.
loans.
• Lack of uniform policies and • Regulatory complexities, safety concerns.
centralized data.
• Manual loan processing, high-interest • Lack of business knowledge, weak R&D.
rates.
This analysis highlights areas for improvement while leveraging strengths and opportunities to foster women’s
entrepreneurship in CMSMEs.
Probit Model Estimation Results
The Probit model estimation results are presented below, assessing the impact of various financial constraints
and policy measures on women's support for family decision-making, a proxy for gender equality.
The coefficients represent the marginal effects on the probability of supporting women's participation in family
decision-making. A positive coefficient indicates an increased likelihood, while a negative coefficient suggests
a decrease in probability.
Table 4: Results from the Probit Model
Variable Coefficient Std. Error p-value
Constant 5.1527 2.641 0.051
Log Female Employees 0.9096 0.635 0.152
Log Business Experience 0.9856 0.487 0.043 **
Education (Above Higher Secondary) 2.4473 0.893 0.006 ***
Lack of Collateral or Guarantee -8.8980 1.079 0.000 ***
Bank Non-Cooperation -3.2045 1.113 0.004 ***
High Interest Rate -4.1797 1.309 0.001 ***
Excess Documentation 0.5829 0.658 0.376
Strict Financing Terms -4.5476 0.847 0.000 ***
Reduced Loan Approval Time 0.1451 0.911 0.873
Women-Focused Finance 4.2672 1.467 0.004 ***
Lower Interest Rate 2.0335 0.995 0.041 **
Ease of Collateral Requirement 3.1601 0.748 0.000 ***
Training and Awareness 1.5643 0.835 0.061 *
Observations 42
Pseudo R-Squared 0.6337
Note: *** p < 0.01, ** p < 0.05, * p < 0.1
The results indicate several key factors influencing women's support for family decision-making in the context
of CMSME financing. Education emerges as a strong positive determinant, with women entrepreneurs
possessing education above higher secondary levels being significantly more likely to support family decision-
making (p = 0.006). Business experience also plays a crucial role, with an additional unit increase in the
logarithm of years in business being associated with a statistically significant increase in support (p = 0.043).
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 461

The number of female employees in a business, while positive, does not reach conventional significance levels,
suggesting that while women-dominated workplaces may encourage participation, other structural factors might
play a more decisive role.
On the contrary, financial barriers significantly impede women's likelihood of participating in family decision-
making. The lack of collateral or guarantees (-8.898, p < 0.001), non-cooperation from financial institutions (-
3.2045, p = 0.004), high-interest rates (-4.1797, p = 0.001), and strict financing conditions (-4.5476, p < 0.001)
all exert a negative impact on gender equality. These findings underscore how restrictive financial policies limit
women's economic empowerment and decision-making influence within their families.
Policy measures that enhance women's access to financing show a strong positive effect. The presence of
women-focused financing facilities significantly increases the probability of gender equality in family decision-
making (4.2672, p = 0.004). Similarly, reducing interest rates (2.0335, p = 0.041) and easing collateral
requirements (3.1601, p < 0.001) create more favorable financial conditions that empower women entrepreneurs.
Specialized training and awareness programs also contribute positively (1.5643, p = 0.061), albeit with marginal
significance.
Overall, the model explains a substantial proportion of the variation in the dependent variable, with a pseudo R-
squared value of 0.6337, indicating a good fit. The findings highlight the critical role of financial accessibility,
supportive banking policies, and targeted financing initiatives in fostering gender equality in decision-making.
Addressing barriers such as high-interest rates, strict lending criteria, and lack of collateral would be instrumental
in strengthening women's economic agency and leadership roles within their families and businesses.
5.2 Discussion and conclusion:
The analysis of Cottage, Micro, Small, and Medium Enterprise (CMSME) financing for women entrepreneurs
in Bangladesh reveals a complex landscape marked by both significant advancements and persistent challenges
in achieving gender equality. A survey of 42 Women-owned CMSMEs (WCMSMEs) provides compelling
quantitative evidence that CMSME financing positively influences family decision-making, promotes gender
parity in business ownership, enhances overall family welfare, and contributes to community development.
These findings align with the established understanding that economically empowering women leads to
improved outcomes for families and communities, enhancing women's agency, decision-making power, and
access to resources, which in turn positively impacts health, education, and economic growth (Ambler et al.,
2021; Taukobong et al., 2016; Bhoganadam et al., 2014).
The introduction of the Credit Guarantee Scheme (CGS) in 2020, which allocated a 10% quota for WCMSMEs,
resulted in a significant 38% increase in the number of WCMSMEs receiving loans and an 18% rise in loan
disbursement for these enterprises. This indicates a beneficial pro-gender effect of the scheme, demonstrating
that targeted financial initiatives can significantly enhance women's access to finance (World Bank, 2018).
Similar policies in countries like Canada, Germany, and the United States are designed to increase women's
access to financial capital, recognizing women entrepreneurs as vital economic assets (Coleman et al., 2019).
In India, banks empower women by offering tailored financial solutions, suggesting that recognizing the "Right
to bank credit" as a basic entitlement for women could be beneficial (Vijay et al., 2024).
Statistical analyses further emphasize that flexible loan terms, expedited approval processes, financing options
tailored for women, reduced interest rates, and simplified collateral requirements are crucial for strengthening
women's decision-making capacity. These elements are essential for fostering gender equality within the
CMSME sector (Agarwala et al., 2022; Agarwal, 2018). Additionally, credit cooperative lending groups in
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Ghana support and promote women entrepreneurship by providing long-term interest-free credit, training, and
capacity-building opportunities (Fieve J. et al. 2022).
Despite these encouraging outcomes, both quantitative and qualitative data highlight ongoing challenges that
hinder women's access to finance. Surveys and focus group discussions reveal persistent issues, including a lack
of collateral, limited commitment from banks, high funding costs, strict lending terms, excessive documentation,
and inadequate women-focused facilities. Regression analysis corroborates these findings, indicating that the
absence of collateral, non-cooperation from financial institutions, and high-interest rates significantly diminish
women's ability to participate in family decision-making, thereby affecting gender equality.
To cultivate a more inclusive environment, policymakers and financial institutions must prioritize the
development of tailored financial products, enhance credit guarantee facilities, implement comprehensive
training and awareness programs, and create incentives for banks and financial institutions to actively support
women-owned CMSMEs. Addressing these systemic obstacles is essential for empowering women and driving
economic progress and gender equality in Bangladesh.
In conclusion, the findings of this study underscore the critical role of financial accessibility and supportive
banking policies in fostering gender equality. By addressing barriers such as high-interest rates, strict lending
criteria, and lack of collateral, we can strengthen women's economic agency and leadership roles within their
families and businesses, ultimately contributing to sustainable development and the achievement of the
Sustainable Development Goals (SDGs).
5.3. Limitations and Future Research Directions:
The research was conducted within a specific timeframe and limited budget, hindering the ability to conduct a
larger-scale survey and collect a more extensive dataset. Funding constraints impacted data collection efforts,
participant recruitment, and overall project execution. Although the study utilizes both qualitative and
quantitative data, it primarily relies on surveys from a small sample of 42 women-owned Cottage, Micro, Small,
and Medium Enterprises (WCMSMEs), which may not provide a comprehensive view of the challenges faced
by women entrepreneurs in Bangladesh. This limited sample size affects the generalizability of the findings.
Furthermore, the qualitative insights could benefit from a larger and more diverse sample, offering a deeper
understanding of these challenges.
The study lays the groundwork for future research, emphasizing the need for larger studies to validate and expand
the findings. This acknowledgement may foster further investigation and attract support from funding bodies
interested in gender equality and entrepreneurship.
6.0 Policy Implications
This study thoroughly evaluates Bangladesh Bank's initiatives aimed at improving financial access for Cottage,
Micro, Small, and Medium Enterprises (CMSMEs), with a particular emphasis on Women-owned CMSMEs
(WCMSMEs). Based on the findings, the following actionable policy recommendations are proposed to enhance
CMSME financing for women entrepreneurs in Bangladesh:
• Expand Collateral-Free Loan Programs: Develop and implement collateral-free loan schemes
specifically for women entrepreneurs, supported by government guarantees to mitigate risks for
financial institutions, as many women lack the necessary collateral to secure loans.
Towards Gender Equality: Assessing CMSME Financing Impact on Women Entrepreneurs in Bangladesh 463

• Strengthen the Credit Guarantee Scheme (CGS): Enhance the CGS to incentivize banks to lend to
women entrepreneurs by increasing WCMSME quotas and simplifying the application process, thus
reducing perceived risks and improving loan disbursement rates.
• Implement Targeted Financial Literacy Programs: Launch comprehensive financial literacy and
entrepreneurship training programs tailored for women, particularly in rural areas, to empower them in
making informed financial and business decisions.
• Promote Women-Focused Financial Institutions: Encourage the establishment of financial
institutions or cooperatives that specialize in supporting women entrepreneurs by offering relevant
financial products and services.
• Incentivize Banks to Support Women Entrepreneurs: Provide tangible benefits to financial
institutions for developing women-focused products and services.
• Enhance Data Collection and Gender-Disaggregated Reporting: Mandate financial institutions to
collect and report gender-disaggregated data to better identify gaps in access to finance and inform
targeted policy interventions.
• Facilitate Networking and Mentorship Opportunities: Create platforms for women entrepreneurs to
connect with mentors, industry leaders, and peers through networking events, workshops, and online
forums, fostering a collaborative entrepreneurial ecosystem.
• Address Socio-Cultural Barriers: Implement awareness campaigns to challenge societal norms that
hinder women's access to finance and entrepreneurship, creating a more enabling environment for
women to thrive as entrepreneurs.
The proposed policy implications aim to foster a more inclusive financial environment for women entrepreneurs
in Bangladesh by addressing the barriers identified in the research. By implementing practical and cohesive
strategies, policymakers can improve women's access to CMSME financing, promote gender equality, and drive
sustainable economic growth. These measures support Bangladesh's broader objectives of achieving upper-
middle-income status by 2031 and fulfilling Sustainable Development Goal 5, which seeks to empower all
women and girls.
Acknowledgement: We acknowledge that this study was conducted as part of the policy analysis training
program by the Bangladesh Institute of Governance and Management (BIGM) and funded by the Skills for
Employment Investment Program (SEIP) within the Finance Division of the Ministry of Finance, Bangladesh.
464 Conference Proceedings-2025

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