The paper aims to analyse the critical factors of women entrepreneurship development in rural Bangladesh. The analysis is based on recent theoretical ideas that have been supported by empirical research findings. The paper depicts an analytical framework based on institutional theory, which focuses on three kinds of factors: regulative, normative and cognitive. Regulative factors refer to different rules and regulations of the Government that facilitate women entrepreneurship development in rural Bangladesh. Normative and cognitive factors include norms, rules, regulation and values of society. Based on the analysis of these factors, the paper provides many significant policy implications on how to improve women entrepreneurship development in rural Bangladesh.