The Role of Social Capital and Microcredit on Female Entrepreneurship in Bangladesh

Abstract

Objectives: Social capital and microcredit have significant effects on female entrepreneurship. This study aims to explore the role of social capital and microcredit in female entrepreneurship in Bangladesh. Methods: Both quantitative and qualitative methods were used to achieve the objectives of the study. The methodological triangulation (social survey and case study, key informant interview, and focus group discussion) was used. A total of 235 sample was selected by using a simple random sampling method. Likert scale was used to measure social capital. Cross Tabulation and Chi-Square tests were applied to measure the relationship between social capital and women entrepreneurship status. Results: The results show that the majority (89.0%) of the respondents were currently entrepreneurs, while 11% were not entrepreneurs. The majority (42.9%) of the entrepreneur were found to be involved in small business, followed by livestock and poultry (28.1%), fishery (7.6%), agriculture (9.0%), handicraft and cottage industry (7.6%), mini-factory (1.4%), direct service (1.0%), and others (2.4%). Regarding social capital, 51.1% of the respondents had high social networks, followed by high civic participation (43.4%) and high reciprocity norms (79.1 %). The results reveal that microcredit has significantly increased the income and expenditure of women borrowers. The Chi-Square tests showed that the social networks, reciprocity norms, and civic participation were significantly associated with women entrepreneurship in the study area. The lack of women's social capital is one of the constraints to be a successful entrepreneur in the study area. Conclusion: The results show that microcredit have positively affected on entrepreneur household income, expenditure, and saving. Regarding social capital, not all of the social capital components have affected on entrepreneur success. Microcredit institutions should provide entrepreneurial training to facilitate female entrepreneurship.