By Bidhan Chandra Shaha, Deputy Director, Bangladesh Bank
“Social media deserves great appreciation not only because people are spending a lot of time on Facebook during COVID-19 pandemic, but also due to the fact that my business does not need to shut down for a single moment amidst the prolonged lockdown in the country,” revealed Anu.
Sumaiya Islam Anu is the founder of Icon Fashion House, a creative online home décor fashion house in Bangladesh.
As in many other emerging economies, the COVID-19 pandemic impacted Bangladesh’s 7.8 small and medium enterprises (SMEs) severely, with micro and women entrepreneurs being hit hardest. According to a survey conducted by LightCastle Partners and Sheba.xyz (2020), more than 50 percent of the total SMEs closed their operation during the lockdown period, and 28 percent of SMEs reported over 50 percent revenue reduction.
Though Icon Fashion House’s sales dropped significantly due to the pandemic, unlike other businesses, Anu did not have to close her business completely. Anu’s decision to embrace innovation and technology in running her business has proven to be a blessing for her, her staff and their families. Her production house also ran on a roaster to comply with health instructions and to properly uphold high hygiene standards.
While others are struggling due to locked down and social distancing, Anu’s online commercial page with 96K viewers provided her customers the comfort of buying their necessities while staying home. In fact, prominent e-commerce platforms in Bangladesh experienced double digit growth in terms of their revenue during lockdown period.
Facing the downturn of the economy, Bangladesh government declared stimulus packages worth USD 10.9 billion (approximately 3.6 percent of its GDP), where nearly USD 2.35 billion was dedicated to SMEs and five percent was maintained for women entrepreneurs. In addition, Bangladesh Bank (BB) issued various policy guidelines and circulars to ease loan repayment periods, reduce interest rate, introduce refinance schemes, and provide interest subsidies.
Anu’s journey has not been an easy one and started with a simple dream to apply her skills, creativity and education to something productive and meaningful to hers and other women’s lives. After graduating in fashion design, Anu decided that her venture would not only give her a unique identity, it would also enable her to empower underprivileged women in her locality.
She chose to conduct her business on an online platform, rather than investing in an offline business model. With this firm commitment, she opened a Facebook business page to run her venture in 2014.
Anu is not an exception in running her business using social media in Bangladesh. The country has shown tremendous growth in internet connectivity in recent years with more than 100 million Internet subscribers. According to the Statista (2020), Bangladesh is ranked as one of the top ten countries in numbers of Facebook users, with 37 million active users out of the total of 2.6 billion users globally.
“It is not always easy for women to venture into the realm of entrepreneurship. Utilizing technology and innovation such as social media allows us to create our own identity,” Anu said. Besides ease of running business, social media offers multifaceted benefits such as connection and engagement with customers, branding, market research, and networking, she explained.
Other women business owners in Bangladesh have started to realize these benefits too. According to Facebook, 80 percent of women entrepreneurs surveyed in Bangladesh found social media helpful for their business.
Despite the tremendous prospect of social commerce, women entrepreneurs in this space still encounter significant hurdles while seeking additional funds to expand their businesses. In 2019, Anu thought of expanding her business with the growing demand of her custom designed bed sheets, pillow covers and other items.
“I needed additional funding for my business expansion, and working capital was my main concern. However, I didn’t have any idea how to access a bank loan. Thankfully, this is when I heard about the Women Entrepreneurs Dedicated Desk (WEDD) from one of my fellow entrepreneurs,” said Anu.
Bangladesh Bank established WEDD in each branch of banks and financial institutions operating in Bangladesh. The WEDD acts as one-stop solution center for the women entrepreneurs offering services ranging from financial literacy guidance to credit management.
IPDC Finance, one of the participatory financial institutions of the Bangladesh Bank’s Refinance Scheme for Women Entrepreneurs, stepped in and offered a BDT 1 million (USD 12,000) loan for two years. To bridge the financial gap, BB has set up a refinance scheme for women entrepreneurs worth BDT 15 billion (USD178 million). Up to June 2020, 26,824 women entrepreneurs like Anu all over the country have benefited from the fund worth BDT 34.20 billion (USD 41 million).
Any woman entrepreneur in Bangladesh can take refinance facilities from this fund at low interest rates. In addition, BB has earmarked 15 percent of all refinance schemes for women entrepreneurs. BB has also instructed all banks and financial institutions to disburse collateral free loan to women entrepreneurs up to BDT 2.5 million (USD 30,000) against personal guarantee.
Today, Anu is also guiding others.
“I have established my own factory in Dhaka, and now my job is to promote other women through my business,” said Anu. She has employed 16 underprivileged women workers in her factory who are also taking care of their families. Moreover, she is also providing mentorship and credit facilities to six new women entrepreneurs to grow their business in social media.
“When one door shuts, many other doors open. The Corona virus has infected millions of people and taken hundreds of thousands of lives. But it has also opened new opportunities for the digital finance, social commerce, and new ventures,” says Anu.
The Gender Inclusive Finance workstream is partially financed by the Swedish International Development Cooperation Agency (Sida) and other partners.