The road to equality: The role of gender-intelligent banking in addressing credit access challenges for women entrepreneurs in Bangladesh

• by Sadia Shahnaz and Shahrukh Ahmed Latif
• May 27, 2025
• 3 min

Despite contributing significantly to Bangladesh’s economy, women entrepreneurs face severe barriers in accessing formal credit, owning only 17.9% of loan accounts and a mere 6.5% of loan assets. Challenges such as collateral demands, bureaucratic hurdles, patriarchal norms, and policy implementation gaps marginalize women in the financial system. However, innovations in gender-intelligent banking—like tailored financial products, digitized loan services, and data-driven strategies—are emerging as powerful tools to bridge this gap. With global attention on gender equity and financial inclusion, Bangladesh has the opportunity to lead by fostering an inclusive financial ecosystem that empowers women-led enterprises and drives sustainable economic growth.

Women entrepreneurs in Bangladesh contribute at least 20%-48% to the country’s GDP​​. While women own 37% of bank accounts, their access to credit remains disproportionately low. Studies also indicate that women hold only 17.9% of loan accounts, which accounts for just 6.5% of total loan assets in the banking sector. This disparity is especially pronounced in women-led small and medium enterprises (SMEs), which often struggle to secure adequate financing. 

A complex web of issues hinders women’s access to credit in Bangladesh. Among the most significant hurdles women entrepreneurs encounter are bureaucratic red tape and complex documentation requirements. Collateral requirements by formal institutions are another significant barrier. In a society where women rarely own assets, such as land or property due to gendered inheritance practices, these prerequisites further marginalize women in the credit system. Additionally, lengthy and bureaucratic loan procedures deter women, particularly those with limited literacy or exposure to formal banking systems. As a result, women entrepreneurs are forced to seek informal credit, despite the risks and higher interest rates. 

Women’s barriers to credit access are not limited to structural challenges. They are also rooted in sociocultural norms. Patriarchal traditions often limit women’s mobility, decision-making power, and financial independence. This leaves them reliant on male family members for financial transactions. Even when women legally own businesses, they frequently require male co-signers for loans, which further perpetuates their dependency. Furthermore, gender bias within financial institutions paints women entrepreneurs as high-risk borrowers, which discourages them from designing tailored financial products for these women.

Policy implementation gaps also hinder efforts to improve women’s access to credit. For example, while the Bangladesh Bank mandatorily allocates 15% of credit portfolios to women entrepreneurs, weak enforcement has rendered it largely ineffective. Similarly, credit guarantee programs designed to facilitate collateral-free loans remain underutilized due to their poor implementation and low awareness among beneficiaries. 

Although Bangladesh’s financial landscape is riddled with these problems, they are not insurmountable. Innovations in gender-intelligent banking have emerged as a potential way to break down these barriers. These include financial products and services designed specifically to meet women entrepreneurs’ needs. For example, Mutual Trust Bank (MTB) provides a small-ticket savings product combined with a secured overdraft facility so that women can access short-term, low-cost credit based on their savings history. This approach encourages consistent saving habits and reduces reliance on collateral. 

Another key development is the digitization of financial services. Bank Asia’s digital loan application system reduced the need for physical branch visits and simplified documentation requirements. This initiative minimizes opportunity costs and makes credit more accessible, particularly for women in remote areas.

Gender-disaggregated data can also play a critical role to make financial products and services more inclusive. Banks can use the customers’ data to create gender-intelligent strategies to better understand and address women entrepreneurs’ needs. Such strategies can help create more inclusive financial products, services, and delivery channels that can ultimately promote their financial independence and nurture sustainable business growth. 

Gender-intelligent banking is not about offering more products but rather about transforming the financial ecosystem from within to be more inclusive. An increase in women’s representation in leadership roles can play a critical role to shape policies better aligned with their needs. 

The problem of women’s unequal access to credit is not unique to Bangladesh. As per the International Finance Corporation (IFC), globally, women-owned businesses face an enormous financing gap of about USD 1.5 trillion in the formal SME sector. This disparity highlights a substantial untapped market for banks to expand their SME loan portfolios by investing in women entrepreneurs. The global context makes the condition in Bangladesh even more significant. Bangladesh can witness tremendous economic growth through gender-intelligent banking practices, tailored financial products, digitized services, and capacity-building programs. At the same time, financial institutions can address sociocultural and institutional biases and policy gaps to work toward the global goal of gender equity and financial inclusion.

Bangladesh is at a pivotal moment where investments in gender-intelligent banking can contribute to sustainable economic growth, reduce gender disparities, and create a more inclusive financial ecosystem. As the country stands at the cusp of a major transformation, its present situation is a call for stakeholders across the globe to create an environment where women-led enterprises flourish and build a more prosperous and fairer society.