INP-WealthPk

Pakistan Empowers Women Entrepreneurs Through Microfinance

February 08, 2022

By Samia Khalid ISLAMABAD, Feb. 08 (INP-WealthPK): Pakistan's recognition of the importance of women's empowerment is helping the country in achieving the Sustainable Development Goals (SDG-5) and portraying a softer image. This will undoubtedly be the first rung on Pakistan's economic, social, and national growth ladder. Pakistan is a developing country, and 48.5% (Year: 2020) of the total population is women (World Development Indicators by the World Bank). In Pakistan, women are the better half of society and have an equal right to economic opportunities. In this context, microfinance institutions have played an important role in fostering women's entrepreneurship in Pakistan. These institutions assist women in building their micro and small businesses, which create revenue and allow them to live a better life. Women's entrepreneurship has risen in prominence in recent decades, and it is now regarded a global phenomenon. Pakistan first appeared on the microfinance map in the mid-1990s, but it wasn't until 2001 that the industry was regulated, and organisations were formally registered, according to the State Bank of Pakistan's (SBP) microfinance regulation. In Pakistan, the proportion of female entrepreneurs has remained much lower in recent years as compared with males. Lack of financial access is one of the key reasons why women lag behind in entrepreneurial activity. Females receive only 3% of small and medium enterprise (SME) business loans, while males receive 97%, according to the SBP total loan portfolio. Furthermore, men receive 87% of microfinance loans, while women receive only 13%. Many banks in Pakistan provide loans to women entrepreneurs in order to boost women’s participation in the economy. Formal education, qualification, and experience in a professional setting are all required. As a result, numerous governmental and private organisations in Pakistan now provide entrepreneurship training. Many women are associated with these organisations or institutes, such as Technical Education and Vocational Training Authority Punjab (TEVETA), Islamabad and Rawalpindi Chambers of Commerce, National Incubation Centre (NIC), technical and vocational institutes, Lahore University of Management Sciences (LUMS), National Vocational and Technical Training Commission (NAVTTC), Pakistan Authority, Management Development Institute (MDI), and Women X (The Women X programme is a World Bank worldwide creativity to encourage the spirit of women entrepreneurs in developing countries). Apart from these organisations, WE CREATE centres serve as an entrepreneurial communal centre for women who are interested in starting or increasing their present business, and WECON (women entrepreneurship conferences) give training to women entrepreneurs. The WECON Movement is considered a platform for empowering the women of Pakistan by connecting them with entrepreneurial awareness opportunities. The Ehsaas initiative was introduced by the government in 2019 with the goal of eliminating inequality, investing in people, and boosting districts that were trailing behind developed districts. The Ehsaas programme is notable for its 50% plus policy, which emphasises the participation of women in financial security initiatives, recognising that the whole population has the right to be economically and socially uplifted. In this regard, women are given interest-free loans through the Ehsaas interest free loans programme for supporting the culture of women's entrepreneurship, which is critical for the economy's survival. This initiative has largely benefited rural women's economic empowerment by providing them with the capital they need to employ their abilities for financial gain. Another wonderful effort within the Ehsaas programme is the Ehsaas Aamdan Programme, which provides individuals with sewing machines, shops, cattle, automobiles, and other assets so that they may generate money in the long term, according to the Poverty Alleviation and Social Safety Division, Government of Pakistan. Since the inception of the Ehsaas programme till March 2021, a total of 1.2 million loans (46% of which to women) have been disbursed with a value of Rs44.42 billion. During July-March FY2020-21, a total of 490,368 interest-free loans (47% of which to women) amounting to Rs17.50 billion were disbursed, according to the Economic Survey of Pakistan 2020-21. The prime minister has announced Kamyab Jawan Youth Entrepreneurship Scheme for young people. Under the leadership and supervision of the SBP, the scheme is aimed at offering subsidised financing through 21 commercial, Islamic, and SME banks. Women entrepreneurs are expected to get 25% of the loans under the scheme.