Entrepreneurship is a key component of economic growth worldwide, including Pakistan. Entrepreneurs identify business opportunities in underserved parts of the economy, utilise more of the country’s human capital, and contribute to technological, intellectual, and service innovation.
Women entrepreneurship is seen to be an integral way for women to enter the workforce and help expand the economy. Therefore,Pakistan’s microfinance sector catering to the financing needs of microentrepreneurs hasalways been focused on supporting women entrepreneurs. According to the Quarterly Update on Microfinance Outreach in Pakistan published by Pakistan Microfinance Network (PMN), as at March 31, 2018, female borrowers constituted 53% of the active borrowers within the segment. While their corresponding ratio GLP is only 37%, it is still an encouraging indicator that more and more women are becoming economically independent and contributing to the incomes of their families and development of the country. Despite the numerous social challenges, female micro entrepreneurs have not shied away from setting up their grocery stores, tailoring units, schools, livestock farming, retail businesses, etc.
Undoubtedly, the ease of access to finance is a major catalyst in promoting entrepreneurship.
Shazia bibi from Multan is one of the many female entrepreneurs of Pakistan who were successfully able to leverage loans from microfinance institutions to set up her own business. Skilled in preparingembroidered clothesfrom a young age, Shazia relied on local vendors to provide her cloth for embroidery in return for meager payments. She did not have sufficient savings tobuy her own cloth.As she faced stagnation at work, Shazia bibi decided to opt for financing options – and came to know about Khushhali Microfinance Bank.
With the loan money, she was able to buy, design and sell her own cloth onwards at a good profit. From there on, Shazia bibi kept on expanding her business and is currently earnins more than PKR 100,000 every month. After starting her own business, she was able to include 10 other females from her neighborhood in the business, hence uplifting economic opportunities and improving livelihoods in her society.
This is a great example of how greater access to formal finance can improve economic empowerment and allow an increasing number of women to participate in the formal economy. Interestingly, it can be argued that better financial access is both a cause (the ability to make decisions) and a result of economic participation (if women are working or participating, it should incline them to maintain their own accounts). Simply put, greater economic opportunity through employment or entrepreneurship is an ideal driver for financial inclusion.
Published in Daily Times, August 18th 2018.