[ Dr. Nazrul Islam, Rashik Hassan, Zeba Samiha, Md. Nafizur Rahman, Mysha Maliha. (2019).

Impact of Financial Inclusion

on the Women SME Entrepreneurs in Bangladesh. Presented at the “2019 – XXVII International Conference on Business,
Economics, Law, Language & Psychology (ICBELLP)” Organized by Eurasia Research held during 22-23 December 2019
at Asian Institute of Technology (AIT), Bangkok, Thailand. This paper received Best Paper Award in the Conference]

Impact of Financial Inclusion on the Women SME

Entrepreneurs in Bangladesh

Prof. Dr. Nazrul Islam

Canadian University of Bangladesh, Dhaka, Bangladesh
Email: [email protected]

Rashik Hassan, Zeba Samiha, Md. Nafizur Rahman, Mysha Maliha

Bangladesh University of Professionals, Mirpur Cantonment, Bangladesh
Email: [email protected], [email protected]

Abstract

Financial inclusion is a critical issue for enhancing the welfare of an economy as well as reducing
income inequality by providing access to efficient financial services to both the privileged and the
poor people of the country. Financial inclusion is a significant issue in Bangladesh as the majority
of the population -especially women, farmers and individuals do not have access to the basic
financial services such as credit, insurance, payment etc. According to the Bangladesh Bank,
Bangladesh views Small and Medium Enterprises (SMEs) important in terms of inclusive growth
strategy as they account for almost 40% of the overall employment and around 80% of the
industrial jobs in the country. Thus, this paper aims at identifying the impacts of financial inclusion
on the women SME entrepreneurs of Bangladesh. To conduct this research, 207 respondents were
chosen from those women who either initiated their own SME or worked as an employee in one.
A structured questionnaire with 5 points Likert scale was used to collect primary data from the
women SME entrepreneurs. Both descriptive and inferential statistics were used in analyzing the
data. Multivariate analysis techniques like factor analysis, multiple regression analysis were
performed to identify the impacts of financial inclusions on the women SME entrepreneurs of
Bangladesh. The study finds impact factors of financial inclusion on women SME entrepreneurs
in Bangladesh. The factors are: easiness in payment, comfortable in transaction, reduced
unemployment problem due to creation of agents, easy payment of utility bill and receiving
remittance, easy to pay loan and premium, no network problem in transaction, and secured area
coverage. Factors such as, easiness in payment, comfortable in transaction, reduced unemployment
problem due to creation of agents, no network problem in transaction, and secured area coverage
were found significant impact factors of financial inclusion on the women SME entrepreneurs in
Bangladesh.

Keywords: Financial Inclusion, Small and Medium Enterprises, Women SME Entrepreneurs,
Easiness in Payment, Regression Analysis.

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 Impact of Financial Inclusion on the Women SME
Entrepreneurs in Bangladesh
1. Background

Financial inclusion in Bangladesh has a great impact on the socioeconomic lives of the people of
the country. Study shows that around 40% of the adult population and 75% of households have
access to financial services in Bangladesh which is an important indicator of their development.
Financial inclusion has helped to access to finance, through banks, through agent banking, through
mobile phones, through ATM, through Micro-Finance Institutions, through insurance sector and
access to finance through co-operatives sector of Bangladesh. Bangladesh Bank addressed the
financial inclusion question both from the supply and demand sides. Bangladesh Bank's Financial
Inclusion Initiatives (BBFII) also helped school banking, working / street children banking, agent
banking, mobile financial services, financial literacy program, small and medium enterprises
(SMEs) financing and agricultural credit. Statistics show that the total number of banks and their
branches in Bangladesh were 48 and 6,717 respectively in 2007, which reached to 57 and 9,955
respectively in 2017. Presently, the ratio of rural – urban bank branches stands at 48:52. The
credit/deposit ratio of the scheduled banks excluding the specialized banks is 0.86, which was 0.81
a decade ago1. Hence, Access to finance is an important initiative for promoting inclusive
economic growth and eradicating poverty in Bangladesh. Access to finance means an opportunity
for the low-income group and poor for implementing their future plan. This has facilitated a greater
access to credit and other financial services to the poor and un-served people of Bangladesh. The
study found that key barriers of financial inclusion are lack of overall knowledge among women
entrepreneurs of the available business opportunities and credit facilities, hesitation in applying
for a loan from a commercial bank, high loan interest rates, rigid policies on loan-related
paperwork and collateral, and lack of knowledge and information among women regarding where
to contact about services2. The study also reveals that the access to information is a key constraint
for women entrepreneur’s ability to take advantage of these opportunities offered by the regulators.
Therefore, this study aims at identifying the impact of financial inclusion on the women SME
entrepreneurs in Bangladesh.

2. Literature Review

Presently, the majority of the households of Bangladesh have access to financial services. Hence,
financial inclusion has positive impact on the lives of the general people of Bangladesh. Study
reveals that financial inclusion increases women income, purchasing power, living standard and
position in the family. It also reveals that after availing regulated financial programs, rural women
become able to meet their emergencies, give child better education, get better medical facility,
reduce dependency on local money lenders which means that financial inclusion programmers
promote women’s economic empowerment (Siddik, 2017). Proactive regulatory policies and
expanded financial literacy are the major determinants for the positive impact of financial inclusion
in Bangladesh. Empirical evidence based on household-level data, shows that the intensity of
financial literacy in Bangladesh is moderate, and it has a positive impact on inclusive finance.

1
https://www.bb.org.bd/pub/research/sp_research_work/srw1903.pdf
2
https://asiafoundation.org/2017/11/01/financial-inclusion-women-entrepreneurs/

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These findings warrant more emphasis on increasing financial literacy for access to finance and
informed investment decisions (Khalily, 2016).

The consequence of financial inclusion was also measured by Joseph and Varghese (2014) on the
enhancement of Indian economy in terms of quantity of bank branches, and the use of debit and
credit card. The observed result was that the use of debit card increased drastically throughout the
period of the study and the number of people with access to the products and services of the bank
decreased even after introduction of financial inclusion in the country. Ezazul & Salim, (2011)
examined financial inclusion and its role in Bangladesh and it concluded that geographic and
demographic dispersion of banking service play significant role in financial inclusion. Rahman
(2009a) has depicted financial inclusion with its relation to the number of bank accounts, MFIs
members, cooperatives and the ratio of adult population. This research reveals major weaknesses
and suggests necessary steps for a better financial inclusion in Bangladesh.

Ravikumar (2010) made effort to find the role of banking sector in financial inclusion and
evaluated the effect of ATM availability, distribution of branches of banks, population for each
branch and deposits of credits of Scheduled Commercial Banks (SCBs). The study concluded that
banking is a vital driver for financial inclusion but most of the population were detached from the
formal financial system due to higher level of poverty. Paramasiven and Ganesh Kumar (2013)
found that branch density has a positive significant impact on financial inclusion. The number of
microfinance institutions, banks, and cooperatives are rapidly increasing in Bangladesh but the
country has yet to cover a large expanse of the rural sector and a small portion of the urban one.
According to Faruk, M. O., & Noman, S. M. S. (2013), these institutions focused on solvent
farmers rather than the struggling or landless individuals in the rural areas. This study stated that
the lack of adequate infrastructure is primary cause of slow financial inclusion in the rural areas.
It claimed a proper transportation system, telecommunication system, availability of electricity
and roads and highways will motivate farmers, entrepreneurs and businessmen to take credit from
the bank. The window for financial inclusion may increase by encouraging women to gain
financial knowledge as they have neither the necessary funds to start up their own businesses nor
the adequate knowledge for conventional financial banking.

Study also identified financial intermediaries should ensure accessibility to the consumers in a fair,
transparent and cost effective manner. This study also mentioned that increasing the access to
deposit accounts, number of branches and ATMs cannot guarantee an easier access to finance but
might increase the burden on the financial institutions instead. Khanam (2017) observed a positive
and significant change on the number of bank branches and credit deposit ratio on the GDP of the
country and an insignificant change in ATM growth on the GDP of the economy. Hans, V. B.
(2016) examined the initiatives and impact of financial inclusion in India. This study stated that
the financial inclusion was directly proportional to micro-credit policies that were introduced in
the economy with proper regulation and consumer education policies. However, there were
problems that needed to be dealt with in terms of social intermediation. Financial institutions still
considered financial inclusion to be a short term measure and found it difficult to implement more
accessible financial services such as customer doorstep banking and paper less banking. The
potential for commercializing and combining science, entrepreneurship and technology remained
poor. Furthermore, it was difficult and expensive to reach deeper into the rural areas and train
individuals how to operate different types of machinery.

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Vong, J., Fang, J., & Insu, S. (2012) conducted a pilot study on impact of mobile money service
on micro-entrepreneurs in rural Cambodia and concluded that understanding mobile money
services has brought a positive effect on micro-entrepreneurs and micro-enterprises in rural areas
enabling rural inhabitants to improve their standards of living and sustainability of their businesses.
According to Ozili, P. K. (2018), digital finance has positively impacted financial inclusion in
emerging and advanced economies providing individuals to more services at a lower price than a
conventional bank. A study conducted by Fareed, F., Gabriel, M., Lenain, P., & Reynaud, J. (2017)
concluded that there is a positive link between financial inclusion and entrepreneurship
encouraging several women entrepreneurs to come up with their own businesses. By introducing
several financial access points such as banking branches and ATMs and introducing additional
financial services that enables consumers to get access to credit facilities, financial inclusion can
be increased.

In another study, Wairagu, R. (2016) concludes credit given to entrepreneurs and SMEs that
measures the activities of the financial sector through administrating funds from savers to investors
brought a significant and positive growth of the economy. The regression result indicates that
credit given to the private sector and interest rates affordability of financial services had a positive
and significant effect on entrepreneurial growth. Durai, T., & Stella, G. (2019) studied digital
finance and its impact on financial inclusion and found out that digital finance allows greater
control of personal finance, swift financial decision making and the ability to make and receive
payments. Improving consumer convenience and providing easier interbank account facilities have
brought significant changes in mobile banking too. Lower service charges and prompt timings
have significant impact on mobile wallets or software as well as credit cards.

Julie )2013( found that financial inclusion and economic growth have strong positive relationship
in Kenya. The study also concluded that economic growth has a strong positive relationship with
branch density and a weak negative relationship with the number of mobile money services. A
study conducted in India by Kamboj )2014( found positive relationship with branch and ATM
density and GDP growth rate of the country. According to Beck et al. )2007( outreach and usage
suck as deposit and lending are important variable in measuring impact of financial inclusion.
Demirgüc-Kunt et. al )2008( accumulated data of demographic and geographical outreach on
access to banking and ATM booths. The effect of digital finance on financial inclusion was
measured by Agufa Midika Michelle )2016( in the banking industry of Kenya. The study revealed
that there was no correlation between digital finance and financial inclusion in the banking industry
as the banks only adopted digital financial services to minimize their operational costs concerning
inaugurating and functioning cost of new branches. Ayyagari, et. Al )2006( evaluated the role and
impact of technology such as mobile, internet, new technology based financial services in financial
inclusion, the study also suggested ways of improving financial inclusion with the help of
technology. Some determinants of financial inclusion were found by Mehrotra et. al )2009( such
as penetrated area as a percentage of total penetrable area, number of cooperatives teams and
branches numbers of bank for every 100 persons.

Study found that levels of human development and financial inclusion in a country move closely
with each other. Among socio‐economic and infrastructure related factors, income, inequality,
literacy, urbanization and physical infrastructure for connectivity and information are also

Page 4 of 17
important factors. However, health of the banking sector does not seem to have an unambiguous
effect on financial inclusion whereas ownership pattern does seem to matter in some countries
(Sarma & Paos, 2011). Study also found that the income growth net of inflation effect was 8.40%
for women as against 3.97% for men indicating that the gender of participating poor undoubtedly
affects the outcomes of these financial programs (Swamy, 2014). The results of Structural
Equation Modeling (SEM) of a research indicate that the perceived financial cost, perceived risk
and subjective norm are the most influencing factors that affect people’s behavioral intention to
adopt mobile banking (Siddik, Sun, & Yanjuan, 2014).

On the supply side, the size of a bank, its efficiency, and the interest rate it charges has a direct
impact on financial inclusion of a country like Bangladesh. On the other hand, in the demand side,
literacy rate is positively and age dependency ratio is negatively related to financial inclusion.
Study also found that bank size has a significant impact on both deposit collection and loans &
advances disbursement of a bank. The study can be beneficial for both government and bank
authorities in developing their policy decisions to ensure more inclusive financial system. Setting
the loan interest rate close to international level and extending the branch facilities can encourage
excluded population to use formal financial services (Uddin, Chowdhury, & Islam, 2017). In a
study on farmers, it was revealed that there are around 86% technically efficient and amongst them,
credit takers were more efficient than non-credit takers (Afrin, Haider, & Islam, 2017). This
indicates that the financial inclusion can help in developing the technical efficiency of the loan
takers. The potential costs of financial inclusions are compensated for by important dynamic
benefits that enhance financial stability over time through a deeper and more diversified financial
system (Hannig, & Jansen, 2010). There is growing evidence that appropriate financial services
have substantial benefits for consumers, especially women and poor adults. Review of literature,
secondary data and participatory evidences show that there are substantial financial gaps across
the economies and within the households. In rural context, it is evident that financial access is low
in developing countries like Bangladesh (Choudhury, 2015).

It has also been revealed that the practice of financial inclusion by Bangladesh Bank contributes
positively in advancing the number of bank branches, members in MFIs and cooperatives; number
of no-frills account; disbursing SME and women enterprise credit, implementing refinancing
scheme in agricultural sector; encouraging savings in school bank account, etc. To fulfill even
some of its progressive goals, it must be regulated and subsidized, and other strategies for viable
financial inclusion of the poor and of small producers must be more actively pursued (Ghosh,
2012). Financial inclusion of access to financial services is increasing worldwide, often with
official support. Greater financial inclusion changes the behavior of firms and consumers in ways
that could influence the effectiveness of monetary policy. The impact on financial stability may
depend on how any improvements in financial access are achieved. Risks may rise if greater
financial inclusion results from rapid credit growth, or if relatively unregulated parts of the
financial system grow quickly (Mehrotra, & Yetman, 2015).

Financial inclusion has a great role to play for promoting inclusive growth of a country. Financial
inclusion ensures access to a well-functioning financial system, by creating equal opportunities,
enables economically and socially excluded people to integrate better into the economy and
actively contribute to development and protect themselves against economic shocks. Financial
inclusion leads to greater asset accumulation by the poor and it is also associated with pro-poor

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growth. Poverty reduction and promoting inclusive growth are the most important policy priorities
of the government of Bangladesh (Faruq, & Prince, 2015). The agent banking is an effective and
credible way of entrenching financial deepening across the unbanked areas of Bangladesh.
Moreover, the study emphasizes that agent banking can secure access to financial services for the
rural poor and generate wholesome development for Bangladesh (Nisha, Nawrin, & Bushra, 2019).
Study also finds that respondents with financial accounts are more resilient than those without
accounts. The chances of being financially resilient are around 1.4 times higher for account holders
than their counterparts (Hussain, Endut, Das, Chowdhury, Haque, Sultana, & Ahmed, 2018).
Hence, the impact of financial inclusion is broadly in the socioeconomic development of the people
of a developing country like Bangladesh.

4. Research Methods

This section describes the designing research, questionnaire design and test of reliability,
determination of sample size, data collection, analytical tools and test of reliability, etc. Both
primary and secondary data were used to conduct this research. Primary data were collected from
the SME Women Entrepreneurs of Bangladesh. Secondary data were collected from the books,
journals, online resources etc.

4.1 Designing Sample

In recent years, the rate of new business formation by women has significantly risen in Bangladesh.
However, women still own and manage significantly fewer businesses than men. According to the
Economic Census 2013, the number of female headed establishments is 0.56 million (7.21 per
cent)3. The sample size of this study was determined by using the following formula suggested by
Yamane (1967).
𝑁
𝑛=
1 + 𝑁(𝑒)2

Where, n is the sample size, N is the population size, and e is the level of precision. For this study,
level of precision is presumed as 0.07 and the population size is 5,60,000. Putting these values in
the above equation, the required number of sample size becomes approximately 204. This study
interviewed 207 women entrepreneurs who are engaged in small and medium enterprise (SME) in
Bangladesh. This figure is well above the critical sample size of 200 for employing multivariate
analysis (Hair et al., 1998). Taking the accessibility and willingness of the employees to respond
to this study into account, Convenience Sampling Method was used to draw the sampling units
(Malhotra, 2007).

4.2 Questionnaire Design

Responses to all the statements in the questionnaire were measured on a five-point scale ranging
from 1 to 5 with 1 indicating strongly disagree and 5 indicating strongly agree. One of the relative

3
https://thefinancialexpress.com.bd/views/female-entrepreneurship-in-bangladesh-1553181544

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advantages of using this scale is its suitability for the applications of multifarious statistical tools
used in marketing and social research study (Malhotra, 1999). The collected data were statistically
processed subsequently to get the useful information. The reliability statistics show that the
internal consistency of the questionnaire is under the acceptable limit (Nunnally, 1978). The
reliability statistics are at the acceptable level (Table 1).

Table 1 Reliability Statistics

Cronbach's Alpha N of Items
0.912 34

4.3 Data Collection

Both from primary and secondary sources were used to collect data. Primary data were used for
identification of the success factors of online commodity businesses in Bangladesh. The survey
was conducted among the SME women entrepreneurs of Bangladesh. The survey was conducted
in 2019. The interviewers were properly trained on the items included in the questionnaire for data
collection before commencing the interview.

4.4 Data Analysis

Along with descriptive statistics4, inferential statistical5 techniques such as, Factor Analysis and
Multiple Regression Analysis were used to analyze the data. A Principal Component Analysis
(PCA) with an Orthogonal Rotation (Varimax)6 using the SPSS (Statistical Package for Social
Sciences) was performed on the survey data. Multiple Regression Analysis 7 was conducted by
using SPSS to identify the relationships between the dependent and independent variables and the
significant factors.

4
Descriptive statistics includes statistical procedures that we use to describe the population we are studying. The data
could be collected from either a sample or a population, but the results help us organize and describe data. Descriptive
statistics can only be used to describe the group that is being studying. That is, the results cannot be generalized to
any larger group.
5
Inferential statistics is concerned with making predictions or inferences about a population from observations and
analyses of a sample. That is, we can take the results of an analysis using a sample and can generalize it to the larger
population that the sample represents.
6
Varimax rotation is an orthogonal rotation of the factor axes to maximize the variance of the squared loadings of a
factor (column) on all the variables (rows) in a factor matrix, which has the effect of differentiating the original
variables by extracted factor. Each factor will tend to have either large or small loadings of any particular variable.
A varimax solution yields results which make it as easy as possible to identify each variable with a single factor. This
is the most common rotation option.
7
In statistics, regression analysis is a statistical process for estimating the relationships among variables. It includes
many techniques for modeling and analyzing several variables, when the focus is on the relationship between a
dependent variable and one or more independent variables. More specifically, regression analysis helps one
understand how the typical value of the dependent variable (or 'Criterion Variable') changes when any one of the
independent variables is varied, while the other independent variables are held fixed.

Page 7 of 17
5. Results and Discussions

5.1 Respondents Profiles

Age distribution of the sample respondents shows that 48.30% respondents were at the age of 18-
24 years followed by 22.70% at the age of 35-40 years, 12.10% at the age of 36-41 years, 9.20%
at the age of 24-29 years and 7.70% at the age of above 41 years (Table 2).

Table 2 Age Distribution of the Respondents

Age Frequency Percent Valid Percent Cumulative Percent
18 to 23 100 48.3 48.3 48.3
24 to 29 19 9.2 9.2 57.5
30 to 35 47 22.7 22.7 80.2
36 to 41 25 12.1 12.1 92.3
Above 41 16 7.7 7.7 100.0
Total 207 100.0 100.0

Fifty-one point seven percent of the respondents were married and 48.30% were unmarried (Table
3).
Table 3 Which of the following best describe your current relationship status?
Marital Status Frequency Percent Valid Percent Cumulative Percent
Unmarried 100 48.3 48.3 48.3
Married 107 51.7 51.7 100.0
Total 207 100.0 100.0

Table 4 shows that most of the respondents (50.20%) have bachelor and above degree followed
by 41.10% have HSC, 8.20% have SSC and 0.50% have Class V-IX degrees.

Page 8 of 17
Table 4 What is the highest level of school you have completed or the highest degree you have
received?
Educational Qualifications Frequency Percent Valid Percent Cumulative Percent
Class V - IX 1 .5 .5 .5
SSC 17 8.2 8.2 8.7
HSC 85 41.1 41.1 49.8
Bachelor and above 104 50.2 50.2 100.0
Total 207 100.0 100.0

The experience of the sample respondents with the use of financial systems shows that 52.70%
respondents have below 1-3 years’ involvement followed by 22.20% have 406 years, 21.30% have
below 1 year, 2.90%% have above 7-9 years, and 1.00% have above 10 Years (Table 5).

Table 5 How long have you been using these systems?

Involvement Frequency Percent Valid Percent Cumulative Percent
< 1 Years 44 21.3 21.3 21.3
1-3 years 109 52.7 52.7 73.9
4-6 years 46 22.2 22.2 96.1
7-9 years 6 2.9 2.9 99.0
> 10 years 2 1.0 1.0 100.0
Total 207 100.0 100.0

5.2 Results of Factor Analysis

The results of factor analysis show that all the variables concerning the impact of financial
inclusion on the SME women entrepreneurs in Bangladesh are very high indicating the variables
are important in this area of study (Table 6).

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 Table 6 Communalities of the Impact Variables
Variables Extraction
1. Now, I can enquire/check my balance .486
2. I can easily withdraw cash .610
3. I can easily deposit cash .566
4. Easy to pay bill for me now .644
5. I can do some savings now .566
6. [Facilitating fund transfer .527
7. I can easily receive foreign remittance .434
8. Easiness in payment to others .685
9. Easy to cash out in shortest possible time .513
10. Easy to send money to my family .691
11. Easy to receive cash from others .656
12. I can buy at any time without hard currency .669
13. Transaction is very fast .627
14. It is affordable to me .643
15. This system is convenient to me .670
16. I feel more secured than before .670
17. The system is nationwide which is helpful for me .676
18. Facilitates me to pay the loan installment .612
19. Facilitating utility bill payment of my house .669
20. Company can follow my loan and I can know my outstanding easily .718
21. I can pay my insurance premium easily .769
22. I frequently use these systems .613
23. Very good network coverage .744
24. Agents are efficient and capable to deal with the problem .383
25. Now it is efficient and swift in transaction procedures .702
26. My transaction is safe .537
27. Helping to reduce unemployment problem .633
28. Helping to develop rural life .571
29. These are cost effective .594
30. Helping to improve the earning standards of mine .506
31. I did not feel any network problem .698
32. This systems are easy to cover remote areas .632
33. There are sufficient number of agents near my house .597
34. Not time consuming at all] .475
Extraction Method: Principal Component Analysis.

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Table 7 shows the factors related to the financial inclusion of the SME women entrepreneurs in
Bangladesh. It shows that easiness in payment, comfortable in transaction, reduced unemployment
problem due to creation of agents, easy payment of utility bill and receiving remittance, easy to
pay loan and premium, easy to pay loan and premium, no network problem in transaction, and
secured area coverage are important for the financial inclusion of the SME women entrepreneurs
in Bangladesh. The variance of factor named is the highest (28.05%) followed by Comfortable in
Transaction (11.10%), Reduce Unemployment Problem Due to Creation of Agents (5.85%),
Payment of Utility Bill and Receiving Remittance (5.06%), Easy to Pay Loan and Premium
(4.50%), No Network Problem in Transaction (3.60%), and Secured Area Coverage (2.98%). The
total variance of the data set is 61.13% indicates that major portion of the data set is included in
the analysis.

Table 7 Total Variance Explained

Initial Eigenvalues
Component/Factors Cumulative
Total % of Variance %
1. Easiness in Payment 9.537 28.049 28.049
2. Comfortable in Transaction 3.773 11.097 39.146
3. Reduce Unemployment Problem Due to Creation
1.987 5.845 44.991
of Agents
4. Payment of Utility Bill and Receiving Remittance 1.719 5.055 50.046
5. Easy to Pay Loan and Premium 1.531 4.503 54.550
6. No Network Problem in Transaction 1.225 3.603 58.153
7. Secured Area Coverage 1.012 2.977 61.129
Extraction Method: Principal Component Analysis

Table 8 shows the factor loadings of the impact variables constituted the impact factors of the
financial inclusion. It shows that the factor loadings of all the variables are very high indicating that
the variables constituted the factor(s) have higher level of relationships with them.

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 Table 8 Rotated Component Matrixa
Variables/Factors Component
1 2 3 4 5 6 7
Factor 1 Easiness in Payment
[Easiness in payment to others] .729
[Easy to pay bill for me now] .677
[I can easily deposit cash] .652
[Easy to cash out in shortest possible time] .647
[I can easily withdraw cash] .636
[Now, I can enquire/check my balance] .560
[This system is convenient to me] .541
[Facilitating fund transfer] .507
Factor 2 Comfortable in Transaction
[I can buy at any time without hard currency] .752
[Easy to send money to my family] .716
[Transaction is very fast] .669
[Easy to receive cash from others] .649
[Now it is efficient and swift in transaction
.641
procedures]
[It is affordable to me] .526
[I frequently use these systems] .506
[Helping to develop rural life] .489
Factor 3 Reduce Unemployment Problem Due to Creation of Agents
[Helping to reduce unemployment problem] .729
[There are sufficient number of agents near my
.622
house]
[These are cost effective] .576
[Helping to improve the earning standards of mine] .521
[This systems are easy to cover remote areas] .474
[Agents are efficient and capable to deal with the
.450
problem]
[My transaction is safe] .404
Factor 4 Payment of Utility Bill and Receiving Remittance
[Facilitating utility bill payment of my house] .613
[I can easily receive foreign remittance] .609
[I can do some savings now] .591
Factor 5 Easy to Pay Loan and Premium
[I can pay my insurance premium easily] .868

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 [Company can follow my loan and I can know my
.795
outstanding easily]
[Facilitates me to pay the loan installment] .571
Factor 6 No Network Problem in Transaction
[I did not feel any network problem] .791
[Very good network coverage] .735
[Not time consuming at all] .489
Factor 7 Secured Area Coverage
[I feel more secured than before] .690
[The system is nationwide which is helpful for me] .617
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 12 iterations.

5.3 Results of Multiple Regression Analysis

Analysis of variance shows that all the seven factors concerning the impact of financial inclusion
on the SME women entrepreneurs in Bangladesh are significantly related to the overall impact.
The results of regression analysis show that the seven factors can explain the dependent variable
by 47% (R Square) indicating that the model is important (Table 9). The other factors might be in
the greater environment like socio-cultural, political, economic, technological, environmental and
legal issues of the SME women entrepreneurs in Bangladesh.

Table 9 Model Summary

Adjusted R Std. Error of the
Model R R Square Square Estimate
1 0.470a 0.221 0.193 0.72787
a. Predictors: (Constant), REGR factor score 7 for analysis 1, REGR factor score 6 for analysis 1, REGR factor
score 5 for analysis 1, REGR factor score 4 for analysis 1, REGR factor score 3 for analysis 1, REGR factor
score 2 for analysis 1, REGR factor score 1 for analysis 1

Analysis of variance (ANOVA) shows that seven factors are significantly related to the overall
impact of financial inclusion on the SME women entrepreneurship development in Bangladesh
(Table 10). All the factors together are significantly related to the overall impact of the financial
inclusion on the SME women entrepreneurs in Bangladesh.

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 Table 10 ANOVAb
Sum of
Model Squares df Mean Square F Sig.
Regression 29.875 7 4.268 8.056 .000a
Residual 105.429 199 .530
Total 135.304 206
a. Predictors: (Constant), REGR factor score 7 for analysis 1, REGR factor score 6 for analysis 1, REGR factor
score 5 for analysis 1, REGR factor score 4 for analysis 1, REGR factor score 3 for analysis 1, REGR factor
score 2 for analysis 1, REGR factor score 1 for analysis 1
b. Dependent Variable: Considering all the factors mentioned above, I have initiated my business and continuing it
successfully.

The individual factor relationships with the overall impact of financial inclusion on the SME
women entrepreneurship development in Bangladesh show that five factors such as, easiness in
payment, comfortable in transaction, reduce unemployment problem due to creation of agents, no
network problem in transaction, secured area coverage are significantly related to the overall
impact (Table 11). This indicates that the factors such as, easiness in payment, comfortable in
transaction, reduce unemployment problem due to creation of agents, no network problem in
transaction, secured area coverage are significantly connected to the dependent variable of overall
impact of financial inclusion on the SME women entrepreneurship development in Bangladesh.
That means that if there is a change in these factors there will be the change in dependent variable
of the model. Factors like Payment of Utility Bill and Receiving Remittance and Easy to Pay Loan
and Premium are not significantly related to the overall impact of financial inclusion on the SME
women entrepreneurship development in Bangladesh.

Table 11 Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
(Constant) 4.058 .051 80.212 .000
1. Easiness in Payment .160 .051 .197 3.145 .002
2. Comfortable in Transaction .137 .051 .169 2.696 .008
3. Reduce Unemployment Problem
.224 .051 .277 4.425 .000
Due to Creation of Agents
4. Payment of Utility Bill and
-.048 .051 -.059 -.947 .345
Receiving Remittance
5. Easy to Pay Loan and Premium -.010 .051 -.012 -.199 .843
6. No Network Problem in
.136 .051 .168 2.688 .008
Transaction
7. Secured Area Coverage .172 .051 .212 3.389 .001
a. Dependent Variable: Considering all the factors mentioned above, I have initiated my business and continuing
it successfully.

Page 14 of 17
6. Conclusions and Recommendations

This study identified seven impact factors such as, easiness in payment, comfortable in transaction,
reduced unemployment problem due to creation of agents, easy payment of utility bill and
receiving remittance, easy to pay loan and premium, easy to pay loan and premium, no network
problem in transaction, and secured area coverage of financial inclusion on the SME women
entrepreneurs in Bangladesh. The most important impact factor is easiness in payment followed
by comfortable in transaction, reduced unemployment problem due to creation of agents, easy
payment of utility bill and receiving remittance, easy to pay loan and premium, easy to pay loan
and premium, no network problem in transaction, and secured area coverage. All the impact factors
are significantly related to the overall impact of financial inclusion on the SME entrepreneurs in
Bangladesh. The individual impact factor relationships with the overall impact of financial
inclusion on the SME women entrepreneurship development in Bangladesh show that easiness in
payment, comfortable in transaction, reduce unemployment problem due to creation of agents, no
network problem in transaction, secured area coverage are significantly related. This means that
these impact factors are significantly connected to the overall impact of financial inclusion on the
SME women entrepreneurs in Bangladesh. If there are changes in these impact factors, there will
be change in the overall impact of financial inclusion on these women entrepreneurs in
Bangladesh. Hence, the policymakers in this SME sector should focus on these issues to develop
SME women entrepreneurship in Bangladesh. However, there is an ample scope to conduct further
study on this matter that may come to some other useful findings for the SME entrepreneurs in
Bangladesh.

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