Fix the financing gap for women entrepreneurs

Imagine a woman in Dhaka who has spent three years building a small textile business. She has loyal customers, a product that keeps people coming back, and a clear vision for growth. All she needs is a loan to expand. But when she walks into a bank, the conversation turns to collateral, and she has none to offer. And just like that, her application goes nowhere. She is one of the 28 lakh women-led SME owners in Bangladesh, who contribute to the economy, but rarely receives the investment needed to survive. Bangladesh has been producing the right language around women’s entrepreneurship for years, but what seems not to keep pace is action. Women-led enterprises represent the majority of the country’s $2.8 billion financing gap in the micro, small, and medium enterprise (MSME) sector, according to an estimate by the International Finance Corporation (IFC) in 2023. The primary obstacle is collateral: women in Bangladesh disproportionately lack assets registered in their own names, which are the standard requirement for formal lending.

That structural barrier has a predictable consequence: less than six percent of Bangladeshi women entrepreneurs are able to obtain bank loans. Men, by contrast, receive roughly 93 percent of startup loans from banks. Those are not figures from a country that has decided to overlook women founders but from a country that keeps describing the problem without redesigning the system that produces it.

Bangladesh Bank’s 2025 startup financing policy was an important step to bridge this gap. It allowed banks to move beyond traditional lending and make equity investments in startups. Interest rates have been capped at four percent, loan limits raised to Tk 8 crore, and the minimum age for founders lowered to 21. Most importantly, it introduced a mandate that at least 10 percent of startup financing should be allocated to women entrepreneurs. This directive matters but 10 percent is a floor, not an aspiration.

A 2026 study examined female-owned SMEs in Bangladesh and found that gender-based discrimination, entrenched by both local tradition and colonial-era frameworks, restricts women’s mobility and their participation in professional networks. This is particularly difficult to accept when we take into consideration that women-led startups globally outperform male-led counterparts by over 60 percent. Yet in 2024, all-female founding teams captured just only around two percent of global venture capital. The underinvestment is not explained by performance. It is explained by proximity: who investors know, who gets introduced into their networks, and whose story matches the picture investors have already formed of what a successful founder looks like. Bangladesh has a version of this problem that goes beyond investor bias. The network that matters for early-stage funding here is small, largely male, and inaccessible to founders who did not come up through the right institutions. Women founders describe doing everything right and still finding that the room where decisions get made is one they were never invited into.

What can we change?

The remedies are not a mystery. They have been identified across enough contexts, in enough research, and by enough women founders themselves, that continuing to present this as an unsolved problem is itself a kind of evasion. Collateral reform is the most urgent fix. A financing system that requires land title or property as the basis for lending will keep excluding women founders regardless of what targets are announced. Revenue-based lending and peer group models have worked in comparable markets. They require banks to change their internal processes, not just their public commitments. Mentorship is the second gap. The Harvard Business Review has identified poor matching and a lack of ongoing honest dialogue as one of the core reasons why mentoring programmes fail. For women founders in Bangladesh, that failure is made worse by a shortage of female mentors who successfully raised capital in this market.

Network access is the third. Research revealed structured introductions to capital have 3.7 times more impact than general networking events. Bangladesh has competitions and accelerators. What it lacks is the pipeline that moves women founders from those programmes into rooms where capital decisions are made. And then there is the question of who makes the decisions. A financing ecosystem with very few women in senior roles at venture capital firms, banks, and accelerators will keep replicating the same blind spots, regardless of the targets written into policy.

Bangladesh is not short of women who want to build something. It is short of systems that take them seriously. The ambition is already there; what women need is access to capital and mentorship.

Tafhimur Rahman is doctoral student at The University of Alabama, US. 

Views expressed in this article are the author's own. 

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