Businesswomen in Micro and Small Enterprises (MSEs) face challenges in access to finance, lack of business premises, growing informal competitions, lack of business skills, labour shortage, and tax rates, among others, a study by National Statistics Bureau states.

The sample size for the survey was determined by using target population of 6,837 MSEs registered in women’s names with the Department of Cottage and Industry, Ministry of Economic Affairs. 

It states that there was no dearth of policy and programmes pertaining to promotion of business and entrepreneurship among Bhutanese women in micro and small business. However, the implementation of policy and programmes needed improvement and should consider gender related challenges

Shortage of financial capital for a business startup, growth, expansion, and innovation is the most common challenge faced by women in business and this situation according to the study manifested underdevelopment of the micro-finance system in the country. 

It states that the evaluation of the implementation of the first action plan of the Cottage, Small and Medium Industry policy 2012 found that the implementation of policy frameworks of Micro Finance Institutions and other forms of business financing and incentives including Public Private Partnership were hampered by absence of policy, legal framework and lack of budget.

The criteria of low interest rates loans provided by Bhutan Development Bank Ltd and group-lending scheme by Bhutan Chamber and Commerce Industry that requires a group of five member to avail loan were found unfavourable.  

The research also stated that the micro finance schemes instituted by the Rural Enterprise Development Corporation Limited that offers collateral free loans at 4 percent interest rate remains mired with political controversy. Similar schemes managed by Loden Foundation, and RENEW have limited fund and coverage according to the research. 

“These evidences are enough to tell that there is so much to do to strengthen the institutional and structural mechanisms for micro-financing system in the country,” it states. 

Most businesswomen asserted that they couldn’t pledge the collateral required by the banks. The problem of getting good business premise was highlighted as another business challenge. 

More than 80 percent of businesses run by women were found operating from rented spaces, 12 percent operated from their own houses and the remaining 5.7 percent operated business in the public market. 

Growing competitions and small market are some of the challenges businesswomen face. This is attributed to micro and small businesswomen located in the low-value markets with low entry barriers, leading to market saturation. 

“Unless business competition is based on innovation and product diversification, the present trend of competition among micro and small businesses is more likely to bring about overcrowding in the small market base affecting their growth, innovation and transformation.” 

Most businesswomen being less educated showed an obvious lack of awareness of business opportunities, policies and business promotion activities initiated by the government and NGOs. 

About 49 percent of the women in business say the lack of financial capital as a challenge followed by 31 percent as difficulty in attracting customers, 22 percent faced informal competitions, 21 percent faced problem of getting good business spaces, and 15 percent face tax rates. 

The study says that women’s lack of productive resources for business startup, operation, growth, and innovation impedes the overall growth and success of businesses.  

The primary aim of the research was to identify ways in which the government, donors, NGOs, and private sector can improve the prospects for business among Bhutanese women.

Percentage ranking of current business challenges

Low access to finance  49.3 

Difficulty attracting customers 31.7 

Informal competitions 22.1 

Getting good business spaces 21.9 

Tax rates 15.7 

Market 14.0 

Lack of variety of goods/services 10.9 

Labour regulations 10.6 

Fear of business failure 7.3 

Lack/low education 6.9 

Lack of basic business skills 6.9 

Customs & trade regulations 5.2 

Access to land 4.8 

Business networks and relationships 3.1 

Transportation 3.1 

Lack of technical skills 2.2 

Purchasing raw materials 2.2 

Crime, theft & disorder 2.2 

Govt. business support schemes 1.7 

Business licensing/permits 1.4 

Tax administration 1.4 

Poorly educated labour force 1.1 

Problem purchasing equipments 1.1 

Low access to technology 0.8 

Access to electricity 0.6 

Male domination 0.3 

Lack of family support 0.0 

Others 5.6 

Don’t know 6.7 

Total 239.2