Targeted support needed for women entrepreneurs to tackle the impact of Covid-19
Commentary17 April 2021
Editorial Desk :
Although the Government has allocated a number of liquidity support and fiscal stimulus packages in response to the Covid-19 pandemic, these packages have not been successful in addressing women's special needs during the pandemic. Even most women entrepreneurs are unaware of the liquidity support, while some are reluctant to apply for loans in spite of being aware. Due to the economic downturn and the uncertainty regarding the future, women need cash handouts more than loans, says a CPD study.
The Centre for Policy Dialogue in collaboration with UN Women revealed the findings of the study at a virtual dialogue on Thursday. It recommends policies for making the pandemic response work for women. The study report highlights a rapid survey on women entrepreneurs' access to the stimulus packages. It also focuses on a range of
issues, such as providing training for women entrepreneurs and improving women's access to finance.
According to experts, female entrepreneurs are finding it difficult to access funds from the stimulus packages, as they do not have collateral against loans. Despite the advice of the central bank, commercial banks are generally reluctant to provide loans to cottage, micro, small and medium enterprises (CMSMEs) because they think it is not cost effective for them to do so. Generally, most female entrepreneurs started their businesses by taking loans from family members, so they do not have track records as bank borrowers. Therefore, it is likely that these women entrepreneurs may not be able to take loans under the stimulus packages.
The CDP study said that more than 41 per cent of small businesses run by women entrepreneurs were forced to shut down their operations completely because of the pandemic. Another 7.1 per cent of women entrepreneurs in the CMSMEs sector squeezed their operations, and 2.9 per cent relocated their operations to smallers or cheap places. Some 44.4 per cent failed to pay rent, 50 per cent say they could not manage to pay taxes and utility bills.
Women entrepreneurs who are suffering because of the Covid-19 slow-down need to be bailed out by offering cash handouts or soft loans whichever suits them. Otherwise their business enterprises would be doomed.