Handicrafts being declared the product of the year in 2024 signifies their role in women's empowerment, export basket diversification, and representation of our culture and heritage on the global stage. Handicrafts are mostly defined as items that are made with hands or using very basic tools. Though most of these items offer utility and some of them are used for decorative purposes, they are mainly appreciated for their artistic value. The popular handicrafts in Bangladesh include, but are not limited to, potteries, nakshi kanthas, sheetal patis, copperware, brassware, bamboo-made items, woodworks, jute crafts, paper crafts, cotton apparels, silk apparels, jewellery made of gold and silver, traditional dolls, pearl jewellery, vases, and so on. Handloom weaving also falls under the category of handicrafts. Weavers in Tangail, Joypurhat, Pabna, Kushtia, Dhaka, and some other districts are well appreciated for their handloom sarees. These handicrafts are not only a source of livelihood for the artisans but also a signature of our cultural legacy.

Contribution to the Economy

Handicrafts require raw materials that are locally sourced and found in nature. Handicrafts support the livelihood of the artisans and promote our cultures and traditions. As a result, the production of handicrafts is surely contributing to the sustainable socio-economic development of the country. According to the Survey on Handicraft Establishments, Bangladesh 2022, the total number of handicraft establishments in the country is 73,542. 51.20% of these establishments are headed by women, and 48.80% of these establishments are headed by men. These establishments have employed around 150,000 people. Out of them, 55.80% are female, and the rest are male. Total investments made in fixed assets in the handicrafts sector amount to BDT 3,609.80 crore, and the total sales of these establishments in 2022 was BDT 2,430.24 crore.

It has been observed that handicraft establishments have formed clusters of homogenous businesses all over the country. Dhaka is known for benarasi, jewellery, brassware, and copperware. Handloom sarees from Tangail are much appreciated. Narayanaganj is famous for jamdani and maslin. Sheetal pati, nakshi kantha, and jewellery businesses have grown in Faridpur. Narsingdi is famous for its lungi, gamchaa, and cotton sarees. Khadi of Comilla is loved by everyone. There are also numerous clusters all across the country.

Export of Handicrafts

An organisation of handicraft entrepreneurs, the Bangladesh Handicrafts Manufacturers and Exporters Association (Banglacraft), actively promotes the export of handicraft items from Bangladesh. According to the organisation, handicrafts from Bangladesh are exported to 50 countries, including the United States, France, Germany, Spain, Holland, Belgium, Japan, and so on. 80% of the handicrafts are exported to European countries, and these items include nakshi kanthas, nakshi bedsheets, home decor, carpets, hand-knit fabrics, terracotta, earthenware, jute-made products, bamboo items, etc. According to the Export Promotion Bureau, the country exported 29.75 million worth of handicrafts in FY2022-23, and the amount of exports of handicrafts in FY2022-22 was USD 42.83 million.

To promote the export of handicrafts from Bangladesh, there should be initiatives to connect local producers with foreign buyers. Small-scale handicraft producers often lack the expertise to reach foreign buyers. Arista Export is such a global export-import platform that connects popular handicraft suppliers to foreign buyers. Multiple Bangladeshi organisations, for instance, Aarong, export handicrafts from Bangladesh to several countries. These organisations are playing significant roles in upholding our culture and heritage globally and increasing the popularity of our handicrafts at home and abroad.

Access to Financing

It has been observed that handicraft establishments rely on NGOs mostly for financing. Formal lenders face challenges in financing handicraft establishments due to lack of collateral, lack of documents, the absence of transactions over bank accounts, the absence of a repayment history, and so on.

To resolve these issues, formal lenders can introduce scorecard-based credit assessment, where handicraft businesses will be assessed based on their future potential. Also, the requirements for documents need to be relaxed to finance these handicraft businesses.

Challenges

The handicrafts industry has not been able to unlock its full potential. The industry is facing challenges such as shortage of capital, shrinking customer base, sluggish economy, inefficient marketing, scarcity of raw materials, rising labour costs, shrinking profit margin, rising energy costs, and so on. At least 82.20% of the handicraft business faces challenges due to a shortage of capital, according to the Survey on Handicraft Establishments, Bangladesh 2022, and 46.50% are suffering from declining sales due to a shrinking customer base. To address these issues, financing for handicrafts businesses on easier terms, vocational training, availability of raw materials, branding of Bangladeshi handicrafts products to the global customer base, and mass awareness need to be ensured. To ensure access to finance for handicraft entrepreneurs, the central bank can set targets for lending to the handicraft sector for formal lenders. B2B platforms should come up to raise awareness about Bangladeshi handicraft items among international buyers and take initiatives to connect the local handicraft producers with foreign buyers.

In Bangladesh, handicraft items are mainly produced by non-technical individuals who do not have an understanding of quality, lack knowledge about accessing international markets, and do not have the expertise for product development. The sector has the potential to progress further if experts with relevant knowledge actively engage with it. There is still a need for intensification of efforts towards the promotion of handicraft items to unlock their full potential to represent Bangladeshi culture and heritage in the global arena.

The author is working as a credit analyst at IDLC Finance PLC. and can be reached at akhlaqur@idlc.com.