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Impact of Financial Inclusion on the Women SME Entrepreneurs in Bangladesh
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Financial inclusion is a critical issue for enhancing the welfare of an economy as well as reducing income inequality by providing access to efficient financial services to both the privileged and the poor people of the country. Financial inclusion is a significant issue in Bangladesh as the majority of the population-especially women, farmers and individuals do not have access to the basic financial services such as credit, insurance, payment etc. According to the Bangladesh Bank, Bangladesh views Small and Medium Enterprises (SMEs) important in terms of inclusive growth strategy as they account for almost 40% of the overall employment and around 80% of the industrial jobs in the country. Thus, this paper aims at identifying the impacts of financial inclusion on the women SME entrepreneurs of Bangladesh. To conduct this research, 207 respondents were chosen from those women who either initiated their own SME or worked as an employee in one. A structured questionnaire with 5 points Likert scale was used to collect primary data from the women SME entrepreneurs. Both descriptive and inferential statistics were used in analyzing the data. Multivariate analysis techniques like factor analysis, multiple regression analysis were performed to identify the impacts of financial inclusions on the women SME entrepreneurs of Bangladesh. The study finds impact factors of financial inclusion on women SME entrepreneurs in Bangladesh. The factors are: easiness in payment, comfortable in transaction, reduced unemployment problem due to creation of agents, easy payment of utility bill and receiving remittance, easy to pay loan and premium, no network problem in transaction, and secured area coverage. Factors such as, easiness in payment, comfortable in transaction, reduced unemployment problem due to creation of agents, no network problem in transaction, and secured area coverage were found significant impact factors of financial inclusion on the women SME entrepreneurs in Bangladesh.
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Female entrepreneurship is important for business and economic development. However, women face greater obstacles than men in accessing financing and information, making it more difficult for them to engage in entrepreneurship. This paper examines the impact of digital financial inclusion on female entrepreneurship by using a national sample consisting of matched data from a digital financial inclusion index and a nationally representative survey. The results show that digital financial inclusion significantly promotes women’s entrepreneurial behavior. We find that digital financial inclusion can ease women’s financing constraints and provide business information to alleviate their information constraints. Furthermore, the development of digital financial inclusion improves women’s work flexibility, inspiring them to engage in entrepreneurship. In addition, digital financial inclusion has a greater effect on entrepreneurship among vulnerable women, such as those with less education or a lack of financial autonomy and those living in areas with high gender inequality, which supports the idea that digital financial inclusion can empower women.
Access to financial services has always been limited in Bangladesh. The need for financial inclusion has thus largely surfaced in the country. As a result, agent banking services were implemented via an inclusive digital financial program across rural and unbanked areas of Bangladesh. Despite having a significant impact upon financial inclusion across developing countries, literature in this realm lacks in-depth investigations on agent banking and its impact on financial inclusion. This study thus aims to represent the overall aspect of agent banking and its association with financial inclusion in the setting of the developing country of Bangladesh. For this research, a case study approach has been employed. The study highlights that agent banking is an effective and credible way of entrenching financial deepening across the unbanked areas of Bangladesh. Moreover, the study emphasizes that agent banking can secure access to financial services for the rural poor and generate wholesome development for Bangladesh.
This study explores the impact of financial inclusion on financial resilience in Bangladesh, using World Bank data on global financial inclusions. It finds that respondents with financial accounts are more resilient than those without accounts. The chances of being financially resilient are around 1.4 times higher for account holders than their counterparts. There was also a significant relationship between gender and financial resilience; males are 1.4 times more resilient than females when other covariates are considered in the regression model.
This article provides a discussion on some issues associated with digital finance – an area which has not been critically addressed in the literature. Digital finance and financial inclusion has several benefits to financial services users, digital finance providers, governments and the economy; notwithstanding, a number of issues still persist which if addressed can make digital finance work better for individuals, businesses and governments. The digital finance issues discussed in this article are relevant for the on-going debate and country-level projects directed at greater financial inclusion via digital finance in developing and emerging economies.
Financial inclusion has a great role to play for promoting inclusive growth. Financial inclusion ensures access to a well-functioning financial system, by creating equal opportunities, enables economically and socially excluded people to integrate better into the economy and actively contribute to development and protect themselves against economic shocks. Financial inclusion leads to greater asset accumulation by the poor and it is also associated with pro-poor growth. Poverty reduction and promoting inclusive growth are the most important policy priorities of the government of Bangladesh. In this paper an attempt has been made to discuss the various dimensions of financial inclusion in Bangladesh for promoting inclusive growth. Due to heterogeneity of socio-economic structures, there are diverging views and different solutions in different countries. So, individual countries need to design their own national strategies for inclusive growth and inclusive financial sector development. Bangladesh Bank (central bank of Bangladesh) has been contributing to the government’s efforts to speed up inclusive growth through its financial inclusive campaign in the country. Progress has been achieved in financial inclusion in Bangladesh but many remains still to be done in deepening financial inclusion. It is imperative to design a long-run strategy for inclusive financial sector in Bangladesh for promoting sustainable inclusive growth as well as for overall economic development of the country.
Financial Inclusion has been recently acknowledged as a key enabler for reducing poverty and improving prosperity. However, more than 50% adults of the poorest households are still unbanked globally. According to IMF (2016), 45% people of Bangladesh are out of formal financial services. High interest rate, vast rural population and low literacy rate are among the prominent factors that restrained the government and the World Bank joint initiatives to reach universal financial access. Researchers have reasons to believe, there are certain other factors that remain unnoticed by the policy maker and which in turn, probably affecting their ability to formulate effective policy. The quest to identify these factors materialize this study. In this study, the determinants of financial inclusion have been clustered in two broad areas: bank specific factors and macroeconomic factors. Then, econometrically try to analyse which group of factors has more influence in determining the level of financial inclusion in a country. In the study, static model like, random effects and dynamic panel models like, generalized methods of moments (GMM) methodologies have been applied. Data from 25 banks: 18 conventional and 7 Islamic banks operating in Bangladesh during the period 2005–2014, is collected to analyze the role of both types of banks in financial inclusion. For robustness, this study also employs Quantile regression approach. The study found that, on the supply side, the size of a bank, its efficiency, and the interest rate it charges has a directs impact on financial inclusion. Where on the demand side, literacy rate is positively and age dependency ratio is negatively related to financial inclusion. In addition to that, quantile regression analysis found that bank size has a significant impact on both deposit collection and loans & advances disbursement of a bank. The study can be beneficial for both government and bank authorities in developing their policy decisions to ensure more inclusive financial system. Setting the loan interest rate close to international level and extending the branch facilities can encourage excluded population to use formal financial services. Finally, the study also signifies that, by developing human capital developing country countries can improve their financial market participation and therefore can foster economic growth.
Purpose – The purpose of this paper is to investigate the impact of financial inclusion on the enhancement of paddy farmers’ technical efficiency (TE). The impact was evaluated rigorously from different dimensions which could be useful in the policy discussion for enhancing efficiency in utilizing productive resources.
Design/methodology/approach – A cross-sectional data of randomly selected 120 paddy farmers from Khulna district in the Southwest region of Bangladesh were collected for this study. Initially, a stochastic production frontier approach was used for estimating farmers’ TE. Thereafter, ordinary least squares and quantile regression models were applied for unveiling the existing relationship between TE and various dimensions of financial inclusion after controlling all other socio-economic characteristics.
Findings – The study findings revealed that farmers were around 86 percent technically efficient and amongst them, credit takers were more efficient than non-credit takers. A non-monotonic relationship
between TE and amount of credit was observed where TE was maximized at amount around 20,000 Bangladeshi Taka (USD255), a medium credit in terms of its amount. In addition, credit literacy was identified as a significant factor for improving TE. Though difference in the choice of sources for accessing credit had little impact on mean TE, its effect was found significantly higher for low scored technically efficient farmers compared to high scored farmers.
Practical implications – The policy toward widening the coverage of financial inclusion would be more effective than providing larger amount of credit to a limited number of farmers for improving their TE.
Originality/value – Such an in-depth assessment of the impact of financial inclusion on TE is probably the first effort in the Khulna district of Bangladesh.
Financial inclusion empowers individuals and families, especially women and the poor, and well-functioning financial systems enrich whole countries. While a plethora of literature exists in connection between the financial inclusion and women empowerment most of those are cross country studies and findings are mixed. And there is relative dearth of studies examining the nexus of financial inclusion and women empowerment of developing economy, particularly Bangladesh. This study attempted to fill this gap. In order to achieve the objective, a survey, by means of structured questionnaire, has been conducted on 500 rural women living in the Kurigram and Gaibandha district of Bangladesh during January to February 2017. Study reveals that financial inclusion increases women income, purchasing power, living standard and position in the family. Study also reveals that after availing financial inclusion progrmmes, rural women become able to meet their emergencies, give child better education, get better medical facility, reduce dependency on local money lenders which means that financial inclusion programmes promotes women’s economic empowerment. Findings of the study is of greater importance to the academicians, practitioners and policy makers of the country to design such packages as to foster financial inclusion which will lead to more women empowerment which in turn will lead to the inclusive development of the country.
This paper investigates the interrelated nature of instrumental freedoms and how they combine to engender financial inclusion amongst low income entrepreneurs. Drawing from Sen’s capabilities approach, we emphasize a need for understanding the freedoms associated with institutional arrangements and the complex causal processes that lead to financial inclusion amongst micro-entrepreneurs. We perform a Fuzzy Set Qualitative Comparative Analysis of 19 countries in Latin America and the Caribbean. The findings indicate four causal combinations for financial inclusion. Our findings indicate that no single instrumental freedom is necessary for financial inclusion; it does not necessarily depend on the provision of microfinance and that political freedom is an important peripheral condition for inclusion. This allows us to question some of the assumptions about how microfinance operates amidst a set of complex institutional instrumental freedoms
Like in many other countries, inclusive finance for inclusive growth has become a policy issue in Bangladesh following the global financial crisis in 2008. Over the past 10 years, intensity of financial deepening and access to financial services has increased. Both banks and microfinance institutions have contributed to higher intensity. A recent study shows that around 40% of the adult population and 75% of households have access to financial services in Bangladesh. Several factors may have contributed. Proactive regulatory policies and expanded financial literacy are the major determinants. In this paper, regulatory policies have been evaluated and the effect of financial literacy on financial inclusion has been examined empirically. Our analysis suggests that the regulatory agencies in Bangladesh have formulated policies for promoting financial inclusion and creating investment opportunities for micro and small firms in particular. Our empirical evidence, based on household-level data, shows that the intensity of financial literacy in Bangladesh is moderate, and it has a positive impact on inclusive finance. These findings warrant more emphasis on increasing financial literacy for access to finance and informed investment decisions.