Bangladesh is an emerging economy of the world. However, it's still lagging in inducing entrepreneurial ventures on a local level. The situation is even direr for women. A study conducted by Mastercard Index ranks Bangladesh as one of the toughest places for females to emerge as entrepreneurs.
However, the situation is slowly changing. Most of the leading banks including the government ones are introducing women loan schemes for personal as well entrepreneurial needs. In this article, let's look into the details of the leading banks offering loans for women in Bangladesh.
Factors to consider before taking a women loan
A women’s loan doesn’t divert much from the traditional loan schemes. As a result, the general factors to be considered before taking a loan also apply in this regard. Here are some of the important aspects to be kept in mind.
The credit score determines the credibility of the borrower. It’s a point system to determine how good a borrower is at giving back the borrowed money. Naturally, this becomes a determining factor for most banks before sanctioning loans.
Most banks do not disclose the actual minimum credit score to be eligible for a loan. Even though the minimum score isn’t disclosed, it should generally be between 700 to 800.
Value of collateral
Collateral is the agreed asset to be paid to the bank in case the borrower fails to repay the loan. The amount of the loan depends on the value of the collateral asset. However, these are only applicable for secured loans.
Unsecured loans don’t require any collateral asset disclosure. But they come with higher interest compared to the secured loans.
Borrowers with a considerable liquidity asset hold priority when it comes to loan sanctions. There are always chances of temporary setbacks when it comes to repayment. Having some form of a liquid asset will help to keep the repayment rolling.
The duration of the loan will impact the overall interest paid against it. Banks often feel comfortable lending for a shorter period. It's also a better choice for the borrower as well since the interest against it will be less.
It's better to avoid long-term loan commitments because even if the borrower wants to close early, banks charge an early settlement fee against the loan.
Best Banks for women loans in Bangladesh
EBL Women’s Loan
EBL Women’s loan is a tailored unsecured EMI-based loan specially designed for professional women. The loan amount ranges from 1 Lac BDT to up to 20 Lac BDT. A borrower must be at least 22 years old to be eligible for this loan.
The salary requirement varies across professions for this loan from a minimum of 15,000 BDT to 30,000 BDT. The loan can be availed with a tenure of 12, 24, 36, 48, or 60 months, whichever works better for the borrower. EBL has a standard loan processing fee of 1% and relevant early settlement fees will also apply.
DBBL Women Entrepreneurs Financing
DBBL Women Entrepreneurs Financing is for women looking to venture into entrepreneurship. As a result, this loan scheme offers several facilities which make it one of the best choices out there.
The maximum loan amount is 50 Lac BDT which is designated keeping the small and medium enterprise entrepreneurship in mind. The loan is applicable for women undertaking cottage, small or medium scale businesses. To facilitate the process, DBBL doesn’t charge any processing fee for this loan. The interest rate is fixed at 9%. The loan can be tenured for any duration between 12 to 60 months.
IFIC - Prantonari (Women Entrepreneurs Loan)
The Prantonari scheme by IFIC bank is designed for women from the grassroots level. The scheme is part of the initiative to empower rural women to increase the life and livelihood of the people.
This is a term loan that can be borrowed as both secured and unsecured loans. The limit for an unsecured loan is up to 5 Lac BDT and for a secured one, it goes all the way up to 20 Lac BDT. However, the loan has a higher minimum repayment period of 24 months. The term goes all the way up to 36 months at a 9% rate.
There is no scope for early settlement with this loan scheme. To be eligible for this loan, a borrower needs to have at least 2 years of experience in the relevant business field in addition to belonging to the grassroots level. The bank requires that the business should generate a sufficient return to ensure loan repayment.
MTB Women Entrepreneur
When it comes to the private sector, MTB is one of the leading banks of Bangladesh. The bank has made its mark through competitive service and ease of banking. The MTB women entrepreneur loan scheme is part of their entrepreneurial lending venture aiming to facilitate entrepreneurs with a need for capital.
One of the schemes under this venture is the MTB Bhagyaboti loan. The range of sum is between 1 Lac BDT to 25 Lac BDT which is one of the highest in Bangladesh. The maximum repayment duration is 36 months. The standard 9% interest also applies to this loan.
A useful feature of this loan is that this is an unsecured loan so no collateral is necessary. In addition to that, the bank also doesn’t require any guarantor to be eligible. However, the borrower needs to have at least 1 year of experience in the relevant business field.
Shakti (Women Entrepreneur) by Union Capital Limited
This woman entrepreneurial loan by Union Capital is geared for an already established business looking for capital to expand or scale up its business. As a result, the loan gets disbursed to the company rather than the individual owner. However, the owner still needs to be a woman to be applicable for this loan.
The upper limit of the loan is at 50 Lac BDT. The loan is geared toward SMEs. However, the borrower can access up to 25 Lac BDT without any collateral. There’s also provision for prioritized service and grace period. The individual details of the loan will vary from business to business and loan amount. A borrower should directly contact the loan department of Union Capital for further details.
MDB Nari Uddog
The MDB Nari Uddog by Midland Bank is similar to the women's entrepreneurial loan offered by DBBL. It's applicable for women who are running a business under the cottage, small or medium enterprise as defined by Bangladesh Bank.
The bank is offering loans of up to 5 crore BDT for eligible businesses. However, it comes with its own set of collateral requirements. The business should be at least 2 years old with a viable market strategy to be eligible for this loan.
Just like Union Capital, the loan is classified as a business and can only be availed by established businesses. There are also refinancing opportunities as outlined by the Bangladesh Bank. The borrower will have to visit their nearest Midland Bank branch to get more information.
Shikha Loan by LankaBangla Finance
LankaBangla Finance is one of the premier financial institutions of Bangladesh that run on joint ownership. The organization has a line of loans under its Shikha scheme. Most of them are geared toward women's empowerment through entrepreneurship.
The ‘Anonnya loan scheme’ is designed for women who have already ventured into entrepreneurship or are looking to get into it. The upper limit of the loan is set at 50 Lac BDT. A borrower can avail up to 25 Lac BDT without any form of collateral. The time duration for the repayment is 60 months.
The financial institute is also offering EMI on the repayment which makes it even easier for businesses to undertake the loan. There is no need for a guarantor and the organization offers priority service during and after loan allocation.
Purnota by IDLC
IDLC Finance is also one of the leading financial institutions of Bangladesh. The organization has a range of loan options for borrowers of every need. Their Purnota scheme is part of the SME loan for women entrepreneurs.
The loan ranges from 2 Lac BDT to 35 Lac BDT. There is no need for any collateral even for the upper limit. The institute also allows flexible repayment based on the revenue generation by the business.
In addition to refinancing opportunities under Bangladesh Bank, Purnota has one of the most competitive interest rates among SME loans. You can avail of this loan with 2 years of business operating record and proof of revenue generation.
That concludes the list of the best banks offering entrepreneurial loans for women in Bangladesh. Though there are other banks as well and each has its unique schemes, these banks and financial institutions stand out because of their service and features. Before getting into one, it's important to read all the loan-related disclosures carefully or better yet, talk with a representative to actually determine the worth and feasibility of the loan.