Abstract: Existing gender ratio in demographic structure of Bangladesh indicates that women comprise almost 50% of its total population, of whom >80% live in rural areas. Women in rural Bangladesh are considered as a vulnerable group and the poorest of the rural poor. The main objective of this study is to show the process of women’s empowerment through the development of micro entrepreneurship in rural Bangladesh. This research is based on the review of study, personal observation and a case study of Grameen Bank and BRAC (Bangladesh Rural Advancement Committee) in four rural areas of Bangladesh. This study has conducted an in-depth interview of 40 women borrowers and 16 branch managers of both Grameen Bank and BRAC. The case analysis shows that microfinance institutions provide poor women with small capital, create an opportunity to conduct small business and assist them to become economically empowered. Women’s participation in home typed, traditional business can significantly build social capital, create awareness and enhance their capability to uplift their position. This study also identifies some socio-cultural barriers of women’s entrepreneurship in rural Bangladesh and concludes with some suggestions for the improvement of the condition.

INTRODUCTION

Bangladesh, located in Southern Asia, bordering the Bay of Bengal, between Burma and India, is one of the least developed and most densely populated countries in the world. Existing gender ratio in demographic structure of the country indicates that women comprise almost 50% of its total population, of whom >80% live in rural areas. Most of the women in rural Bangladesh treated as vulnerable and the poorest of the rural poor. In such a context, women must be involved in income-generating activities to promote economic growth and social transformation; otherwise, no development approach can get its real shape. Over the last two decades, a number of Non Government Organizations (NGOs) have been emerged in Bangladesh to support the rural poor women in the country by providing them with collateral free small loans. Alam and Miyagi (2004) essentially remark that microfinance creates income-generating activities, which are accounted as micro entrepreneurships. The NGOs in Bangladesh provide and organize various services to the rural women through micro credit programs, including social mobilization, health care, literacy and education, sanitation, water supply, agriculture, etc. Grameen Bank and BRAC (Bangladesh Rural Advancement Committee) are two of the most successful and the largest NGOs in Bangladesh that have created opportunities for the poor women to become micro entrepreneurs. The development of women’s micro entrepreneurship has brought changes in their lives. The present study, therefore, investigates rural women’s involvement in microfinance programs and their entrepreneurship activities through which they become financially empowered.

Microfinance, micro entrepreneurship and women’s empowerment: The concept of women’s empowerment was first invoked by third world feminists and women’s organizations in 1970s (Bisnath, 2001; Datta and Kornberg, 2002; Mosedale, 2003). Women’s empowerment can be understood as a process whereby women, individually and collectively, become aware of how power relations operate in their lives and gain the self-confidence and strength to challenge gender inequalities (Oxaal and Baden, 1997). Empowerment is related to change and microfinance has changed women status socially, economically and politically. Micro credit is a mechanism under which credit is provided to the poorest of the poor on a group liability basis instead of any collateral. From the evidence of millions of microfinance clients around the world, Littlefield et al. (2003) demonstrate that access to financial services enables poor people to increase their household incomes, build assets and reduce their vulnerability to the crises that are so much a part of their daily lives. In a study of Grameen Bank and BRAC, Hashemi et al. (1996) investigates, whether women’s access to credit has any impact on their lives. Their results show that women’s access to credit contributes significantly to the magnitude of the economic contributions, an increase in asset holdings in their own names, an increase in their exercise of purchasing power and in their political and legal awareness. The study also finds that access to credit is also associated with higher levels of mobility, political participation and involvement in major decision-making for particular credit organizations. Bernasek (2003) explores three indicators of women empowerment regarding micro credit through Grameen Bank perspective: women’s power control over family-planning decisions; women’s power concerns violence against women and indicator of empowerment concerns the ability of women to health and education of their children.

Despite many success stories, some studies have criticized credit programs with special reference to high rates of interest charged by the credit institutions, less/un-successful at reaching the vulnerable poor, little or no control over loans of women borrowers, unchanging levels of poverty, etc. (Mallick, 2002; Goetz and Gupta, 1995; Amin et al., 2003). Even though, microcredit is an attractive tool for producing better outcomes in terms of income and assets, it is more effective for relatively wealthier borrowers compared to non-wealthy borrowers (Rahman et al., 2009). Nevertheless, the positivists have acknowledged that micro-credit provides an effective mechanism for alleviating poverty, improving women’s status and empowering them by creating an environment for small businesses (Pitt and Khandker, 1996; Mayoux, 1999; Littlefield et al., 2003; Lakwo, 2006).

The term entrepreneurship is used as a business initiation or ownership; it is an idea of interchangeably with small business (Diochon, 2003). The concept of entrepreneurship is inseparable from economic growth while entrepreneur acts for economic development. It has also been described in terms of social relations, which focuses on social competences (Baron and Markman, 2003) and social capital (Stryjan, 2006). Women’s entrepreneurship is significant in different ways: their financial capability has been gained in active involvements of economic activities and financial improvements have impact on the socio-economic development of country (Esema, 2007). Microfinance has been significant to develop micro entrepreneurship programs and these programs have been increasing in developing countries where most of the recipients of micro enterprises are women (Kevane and Wydick, 2001). Women’s entrepreneurship is primarily based on their indigenous knowledge, skills and traditional livelihood. Alam and Miyagi (2004) argued that microfinance provides small loan to the borrowers to conduct their large number of micro enterprises, which are more traditional like poultry, livestock rearing, small varieties shop, tea stall, handicrafts, handloom, transport van and small-scale agriculture.

Research objectives: The primary observation finds a strong relationship among microfinance programs, women’s small businesses and their potential self-dependency and empowerment in the rural areas of Bangladesh. Therefore, the main objective of this study is to describe the process of women’s empowerment through the development of small entrepreneurship with special reference to the approaches of microfinance programs of Grameen Bank and BRAC in Bangladesh. The study investigates, the effective involvements of women in small business and their potential role in the context of development. More specifically, the study objectives are:

MATERIALS AND METHODS

The research strategy followed in this study is a case study of two leading and large NGOs in Bangladesh: Grameen Bank and BRAC. The study has been conducted at the rural areas of four administrative divisions of Bangladesh, including Dhaka, Chittagong, Rajshahi and Khulna.

Table 1 shows, the study areas and the study participants. The backgrounds for choosing these areas are that the villages are far away from the cities, their economy is based on agriculture and there exist an unimpressive socio-economic condition of the rural women. Moreover, several branches of Grameen Bank and BRAC have been working for the promotion of women’s socio-economic status through credit-based programs.

Table 1:	Study areas and study participants

We have selected 40 women borrowers (20 from each of Grameen Bank and BRAC) and 16 branch managers (8 from each of Grameen Bank and BRAC) purposively for an in-depth interview. Data have been collected using a semi-structured interview method, personal observation and different documentary sources like books, journals, conference proceedings and the organizational home pages. The face-to-face interviews were conducted during April-May 2009. The study is qualitative in nature and the interview data have been analyzed and interpreted thematically.

Case studies of Grameen Bank and BRAC
Grameen Bank (GB): Grameen Bank (GB) was founded by Prof. Dr. Mohammad Yunus (Nobel Laureate of 2006) in a Bangladeshi village named, Jobra in 1976, as an action research project. GB was established as an independent financial institution in September 1983. Now, it is a private specialized bank with 94% of the stocks owned by the poor borrowers and the remaining 6% owned by the government. As of July 2009, it has 7.93 million borrowers, 97% of whom are women. With 2,558 branches, GB provides services in 84,573 villages. In Bangladesh, Grameen also functions as a savings bank, makes college and housing loans and operates projects in areas such as telecommunications, yogurt production and solar energy. The five major themes of Professor Yunus, as asserted by Bornstein (1997) include:

GB promotes credit as human rights. It provides larger loans, called micro-enterprise loans, for those members who are moving ahead in business faster than others. There is no restriction on the loan size and so far, 1,944829 members took micro-enterprise loans. Table 2 lists, the top 25 items of microenterprise loan amounts for which members took loans.

Bangladesh Rural Advancement Committee (BRAC): BRAC, a development organisation founded by Fazle Hasan Abed in February 1972, soon after the liberation of Bangladesh. Today, BRAC is one of the largest global providers of financial services for the poor. BRAC offers two different microfinance products: micro loans (group-based, exclusively for women) and microenterprise loans (individual loans for both men and women) under three different schemes:

As of June 2009, BRAC has provided services to 110 million people, covering 69,421 villages, 509 upazials (sub-districts) and 64 districts. It has adopted several social and economic development programs. BRAC core programs include four main ones: BRAC Economic Development Program, BRAC Social Development, Human Rights and Legal Education Services Program, BRAC Education Program and BRAC Health Program. Besides, BRAC has several supporting programs including training, research and evaluation, advocacy and human rights, human resources, public affairs and communication, finances and accounts, publications, etc. To increase women’s assets, building financial capacity BRAC provides enterprise development training to assist ultra poor women due to manage their business.

Table 2:	Top 25 items of microenterprise loan amounts for which members took loans
Grameen Bank Annual Report 2007

In 2007, BRAC has given skill and development trainings to 40,000 ultra poor members for expand their knowledge in specific entrepreneurship.

Recent growth of microfinance programs of Grameen Bank and BRAC has shown that about 7.54 million female borrowers of Grameen Bank and 7.37 million of BRAC’s members have attempted to make them as small entrepreneurs.

RESULTS AND DISCUSSION

This study analyses interview data and confirms some of the existing findings in addition to the process of credit-based empowerment of women in rural Bangladesh. The process involves the input of small loans and services, as provided by the credit institutions, the creation of women’s agency and an environment of conducting small businesses and the empowerment of women through building social capital, creating awareness and developing capabilities.

Credit institutions as the providers of small loans: Microfinance organizations extend small loans and technical assistance to the poor for self-employment projects that generate income, allowing them to care for themselves and their families. Microlending organizations operate worldwide, providing services to clients who are typically women and who cannot meet traditional collateral requirements. Grameen Bank and BRAC are committed to provide small loans to their borrowers-mainly to the rural poor women in Bangladesh who do not have access to formal banking systems. Women can start small local/traditional business with micro loans, which was impossible for them before their participation in microcredit programs. Establishing wage employment opportunities for the borrowers, microfinance is now extolled in many areas of Bangladesh covering a large number of poor women. The staffs of GB and BRAC have mentioned that they encourage rural women to become members of their institutions and they provide small loans and organize some training programs for them so that they can know how to utilize their loans properly and start small businesses.

All the 40 borrowers are more or less successful in their endeavor, this study, however, found 12 most successful members in GB and BRAC. Table 3 shows the initial loans taken by these 12 borrowers from the credit institutions and their present assets, based on the initial loans.

Following the success of the borrowers, both the institutions extend loans for rural-based micro-enterprises in which women can apply their indigenous knowledge and many women thus have succeeded in their endeavors. It is also, evident from one of the borrowers of the GB who explained her present financial development using small loan in the following way:

Development of women’s micro entrepreneurship: Over the two decades, microfinance has been potential to creating rural women’s entrepreneurship in Bangladesh. Women’s pervasive traditional works have remained business activities so that they have treated as wage earners. The study finds that the rural poor women are involved in different types of small businesses and the most important business, as can be shown in Table 4, is related to poultry and livestock, followed by traditional handicrafts, small shops, village phone, vegetables and fruits cultivation, preparing and supplying traditional sweet dishes, etc.

Table 3:	The first loans and present assets of some of the most successful women
1 US$ = 70.00 Bangladeshi Taka (around)

Table 4:	Women’s involvement in different types of small businesses

Poultry and livestock: It is notable that the vast source of economy of Bangladesh is agriculture, where rural women are more familiar and well skilled with some agricultural activities like food processing, paddy husking, vegetables cultivation and livestock rearing. Due to the family tradition, women’s indigenous knowledge and skills and the opportunities of making more profit, many of the credit borrowers are involved in cattle rearing. Most interestingly, 15 of the 40 women borrowers have mentioned that they have built their assets by conducting only livestock and poultry rearing business. One respondent expressed her feelings in the following way:

Traditional handicrafts: Traditionally, women have been familiar to some non-farm self-employment activities like dressmaking and embroidery works, but this work is widely recognized as a source of entrepreneurship for the male people of Bangladesh. Nowadays, women’s entrepreneurship is expanding in this area. The members of Both GB and BRAC have brought a remarkable change in their lives by conducting business on traditional handicrafts and embroidery works, including nakshikatha, wall mats, household accessories, fashion items, jute bags, etc. One of the interviewees stated how small business of traditional embroidery has changed her socio-economic status:

Small shop business: Five of the respondents reported that they were conducting businesses based on small shops such as grocery, CD recording, video cassette, etc. Some women have established small grocery shops attached to their homes. As a result, other family members can also take care of their businesses. One of the women borrowers mentioned that she received 5000 taka from Grameen Bank in 2005 to set-up a grocery shop. After repayment of her loan, she further borrowed 7000 taka. Her grocery business is growing-up day-by-day. Now, she is happy with her small shop, the profit that she makes from the shop and with her five-member family.

Another woman, who was conducting a small shop, noted that she established a small shop of video cassettes and CD recording. She joined the GB’s loan scheme in 2004 and received Tk. 5000 to expand her business. After repayment of the loan, she received another 5000 taka. Now, she is sending her son and daughter to schools, she can manage meals for three times a day, buy nice dresses for her children and she also can save money for future.

Village phone business: Information technology is powerful tool to empower women. GB has excogitated a uniqueness program for the marginalized women with providing access to information and communication technology. Women got the opportunity to become a good user of technology by investing small loan of GB.

GB has introduced Village Pay Phone Program only for successful members (rural women). Under this program, the members can be the owners of mobile phones. Ample literature suggests that Village Pay Phone has been puissant to determine their status as an entrepreneur, increase skills, knowledge and to empower them economically and socially (Bays et al., 1999; Aminuzzaman et al., 2003; Alauddin, 2004). Recently, there are 187 borrowers have been holding the VP in the branch of Daulatpur, Kushtia. The study finds three members who professed about their profitable business of village phones. One of the participants put her statement:

Cultivation of vegetables and fruits: One of the most successful borrowers of the Baniboh branch of GB under the district of Rajbari, cultivates vegetables and fruits with her husband and two young sons. She has established a large fruits garden with mango, lichi and guava trees. As a successful entrepreneur, she achieved more fame in the local area. Mentioning her success using microcredit within 18 years, she expressed that:

Business of traditional sweet dishes: Traditional sweet dishes are interlinked to the culture and heritage of Bangladesh. People of Bangladesh are habitual to take different types of sweet dishes to entertain their guests. We found two of the respondents were involved in preparing and marketing traditional sweet dishes. One respondent started her sweet dish business with the capital of Tk. 2500. She stated that:

Other businesses: Women are also engaged in rice/paddy trading, rent of rickshaws, cloths business, studio business, preparing and supplying fishing nets and other fishing instruments and so on. Concerning cloths business, one of our study respondents mentions that she manages her cloths business in a small room of her house. Rural women feel comfortable to buy essential cloths from her house, because it is often not possible for them to go outside for shopping ignoring some religious restrictions. She further comments:

Empowerment through micro entrepreneurship: Empowerment implies in the better feeling of lives. Keller and Mbwewe (1991) describe empowerment as a process whereby women become able to organize themselves to increase their own self-reliance, to assert their independent right to make choices and to control resources, which will assist in challenging and eliminating their own subordination. It is widely recognized that women’s paid work and economic capabilities can facilitate them to achieve own assets, control over resources and gain self-confidence and self-esteem. The present study finds that the poor women in rural Bangladesh borrow some small loans from the credit institutions, start small businesses based on their traditional knowledge and become empowered through building social capital, creating awareness and earning capabilities (Fig. 1).

Building social capital: Empowerment is related to the concept of social capital (Swain, 2007) and social capital has been described in terms of microfinance (Larance, 1998; Dowla, 2006).

Fig. 1:	Women’s empowerment through developing micro entrepreneurship

Participation to the credit-based micro entrepreneurial activities of BRAC and GB creates an opportunity for the rural women to create a strong social network and improves women’s socialization. Socialization increases women’s mobility and connectivity:

In the process of socialization, women can gain confidence and self-esteem through group meeting and discussion. It is a vision of the groups to engage in the cooperative services. In the group, women have learned two moral qualities: responsibility and respect to others.

Raising awareness: Credit based activities of GB and BRAC emphasize weekly group meeting where they can express their views, share ideas and exchange information. Various training programs facilitate women to improve their financial capacity, manage their assets and businesses, in which they become aware of change in their lives. Mizan (1994) strongly argued that in the group based credit program, women can enter the social network system and their long time participation in the different programs help them to gain more decision-making power that have significant and positive impact on women’s status. Women’s effective awareness liberates their lives from many social vices and enables them to reduce poverty. One of the interviewees mentioned that:

Building capability: Capability approaches generally incorporate to the fundamental needs of the people. Women have achieved financial capability by conducting small businesses, which was simply impossible before joining in the income generating activities. Financial capability has given them social identity, which strengthens their individual and social power. Now, they can exercise economic power as an active and potential income holder of the family. It is indefeasible that financial capability immures other capabilities such as:

Major obstacles of women’s micro entrepreneurship: Microfinance has an important impact on the lives of the poor women in Bangladesh; however, they have been encountering some problems in conducting their micro enterprises. Successful entrepreneurship depends on good communication and access to new information. Interaction with other businesspersons can help to initiate proper strategy and prevent misguidance. The study explores the following important problems of micro entrepreneurship in rural Bangladesh:

CONCLUSION

Microcredit is an important financial instrument to generate economic activity and self-employment opportunities for them. The case analysis of Grameen Bank and BRAC suggests that the credit institutions provide collateral free small loans and other facilities to the poor women and creates an agency for them to conduct micro enterprises.

Some of the common entrepreneurial activities in which the Bangladeshi women are involved include poultry and livestock, traditional handicrafts, small shop business, village phone business, cultivation and supplying of vegetables and fruits, traditional sweet dish business, rice/paddy trading, rent of rickshaws, cloths business and so on. Involving in such type of small businesses, women in rural Bangladesh have built social capital and improved their mobilization and socialization, raised their socio-economic and political awareness and earned financial capability. Women’s financial capabilities foster women’s empowerment and development, where empowerment implies economic power and control over resources.

Thus, the micro credit has developed women’s micro entrepreneurship in rural Bangladesh and has increased their family income and standard of lives, increased awareness, developed capabilities and empowered women to contribute socio-economic status of individuals, groups and the nation as a whole.

In spite of having such positive impact of micro credit on poverty alleviation and women’s empowerment, the overall condition of the poor women in rural Bangladesh is not at a satisfactory level. The credit institutions are not much care about the extreme poor. Moreover, there exits a number of other problems, including the exercise of patriarchal norms, values and social customs; lack of education and business skills of the women; less opportunities to access to the market and lack of infrastructural facilities that hinder the women’s micro entrepreneurship in rural Bangladesh. Therefore, the study suggests that governmental and non-governmental organizations need to take more initiatives to increase women’s participation in the credit-based small businesses. Women should have easy access to loans, suitable business and the market. They should also be provided with basic education and training to create awareness, increase knowledge on business and the market, build capabilities and to promote business environment and facilities for them.