The speakers at a report launch on financial inclusion for women entrepreneurs underscored the critical need to enhance financial literacy and awareness towards projecting women-led small and medium enterprises (SMEs) and entrepreneurs as positive players of the market and end biases and unconducive environment hampering their growth in trade as women comprise 22 percent of the total labour force in Pakistan.
The Sustainable Development Policy Institute (SDPI) with the Friedrich Naumann Foundation (FNF) organised the Launch of the Report titled ‘Advancing Financial Inclusion for Women Entrepreneurs in Pakistan’ here on Sunday.
In his opening remarks, Joint Executive Director SDPI, Dr Vaqar Ahmed said the report is the third research conducted in collaboration with the FNF that sheds light on financial inclusion in the context of women entrepreneurs. However, there would be other women stakeholders apart from the female entrepreneurs who needed deeper research so that their inclusion could be prioritized, he said and added, the SDPI’s past research evidence shows that women’s financial inclusion is directly co-related to the household level financial literacy. In this regard, this research becomes very important.
Dr Vaqar noted that the issues around credit, taxation, regulatory hurdles were all well known, whereas all these constraints needed to be looked into a political economy context to carve a way forward whole hat owning these limitations.
He added that the discourse should focus on outcomes offering a roadmap approach on the report’s recommendations and prioritise the action matrix while moving forward and offer it to the government, private entities, business associations, chambers of commerce, the banking associations, and others.
He underlined that everything under financial inclusion could not be done by the government and regulatory bodies, whereas private sector would need to come forward and offer ideas which are more innovative than the conventional approaches.
Birgit Lamm, FNF Country Head in her keynote address said the report document would provide policy umbrella on the work done by FNF on promoting entrepreneurship among marginalised groups particularly women forming fifty percent of the country’s total population.
She added that FNF has supported individuals on the micro level of entrepreneurship to support their businesses, whereas the financial challenges like capital management during first five years of establishing businesses across the globe were the biggest risks faced by women.
“Lack of CNIC and certain registrations and formalities and societal biases makes it harder for female founders to get support for her startup as compared to the male founders. We need to not only focus policy but also education at different levels from schools to media to promote women as equally reliable business partners as men,” Lamm said.
Faeyza Khan, Adjunct Faculty, SDPI and Head of Inclusive Finance, TANGENT in her presentation on Advancing Financial Inclusion for Women Entrepreneurs in Pakistan explained the study methodology that included interactions with Central Bank, SECP, Regulatory bodies, Women chambers of commerce, SAARC chamber of commerce, HBL the pioneer of women banking products, and microfinance banks starting from high level to middle level banks.
“Globally there is a USD 28 trillion opportunity to tap through women inclusion into trade and economy. However, around 231 million women run formal businesses in middle and low income countries. Globally, women are 38 percent of the labour force which is 22% in Pakistan,” she added.
Khan said there were 13.5 million women workers in the country out of which 7 million were agriculture workers categorised as family workers and remain unrecognised and unpaid.
Women in 2018-19, she said had earned just 18 percent of their men counterpart under unpaid care work and spent 10 times the hours as men in unpaid care work.
The study had found that it was difficult for female SMEs and entrepreneurs to get a loan and if available it was expensive for them as women lack access to same kind of networks, information pools and mentorship in business and trade, she said.
“There are 5.3 mln SMEs in Pakistan and women owned are one percent as per World Bank data. India has 14% women SMEs and Bangladesh has 7.4 percent,” she said.
Faeyza Khan said the study recommended to increase awareness on positive impacts of women entrepreneurship, leverage connectivity, and introduce robust result measurement frameworks for promoting women in trade.
Gulalai Khan, Revenue Moblisation, Investment and Trade (ReMIT) Programme said ReMIT has been extensively working with the women entrepreneurs in various projects.
She added that this issue was international and not limited to Pakistan as in 2022 women exiting businesses were more than men and 24 percent of them were those who started it keenly but left due to lack of profitability, family and personal reasons.
The policy or regulatory environment was very important in supporting women to start and scale up their businesses which was unfavourable in Pakistan, she said, adding, “Women lack information on taxation policies and mechanisms as these are women running businesses but are unable to file their taxes and information manipulation is done by the systematic environment.”
Murium Hadi Financial Inclusion Specialist, Asian Development Bank said the status quo would prevail as patriarchal mindset would stick to the system but it demanded plans and strategies to work within for betterment.