Barriers to Women Entrepreneurs in Pakistan

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Women are an integral part of the socio and economic development of a country. Women are more than 50 percent of total population of Pakistan. They are playing a positive and constructive role in the development process in Pakistan. The success story of agriculture is due to excellent logistics provided by women. Women are also playing productive role in selected positions of industry as they are contributing on premises of plants, factories and offices and some at home. In services sector too, women are playing an important role. However, we need to go a long way to steadily expand the association of women in the development process of Pakistan.

Women entrepreneurship is now considered an important tool in enabling female empowerment and emancipation. The benefits of female entrepreneurship are many and varied. Moreover, an economy thrives when women get the same opportunities as men. However, women entrepreneurs in Pakistan are facing many barriers.

The British Journal of Education, Society & Behavioral Science conducted a research study to examine the gender specific barriers that hamper the women entrepreneurs from entering the mainstream of entrepreneurship in Pakistan. The study was conducted in four major cities of Pakistan i.e. Faisalabad, Multan, Sargodha and Sialkot during a period of 6 to 8 months and was published on 11th December 2012. The findings of the study indicated that factors like lack of finance, restriction on mobility, limited decision making, lack of role models and guiders, men’s hold on markets, family pressure and discrimination were the major barriers in the way of women entrepreneurship in Pakistan.

The respondents in Faisalabad pointed out that lack of finance, restriction on mobility, limited decision making power, childcare burden, family pressure and discrimination were the as main barriers for women entrepreneurs. In Lahore, the lack of finance, discrepancy in property rights, limited decision making, communication gap with men, discrimination and harassment were identified as major barriers for women entrepreneurs. In Sargodha, the major factors which were perceived as barriers to women entrepreneurs were lack of finance, restriction on mobility, limited decision making, lack of role models and guiders, men’s hold on markets, family pressure and discrimination. The respondents in Sialkot indicated lack of finance, poor knowledge about loan process, limited decision making power, lack of education, childcare burden and discrimination as major barriers in the way of women entrepreneurs.

A World Bank report also states that less than 25 percent of Pakistan’s businesswomen are micro finance borrowers even though the country’s micro finance environment is one of the worlds’ most progressive. The report says that discriminatory lending practices are forcing Pakistan’s women entrepreneurs to look beyond micro finance providers for capital to start and sustain their businesses.

The report also finds that micro finance loans for businesses are largely unavailable to women entrepreneurs, especially unmarried women who are considered high-risk borrowers.  Micro finance providers enforce strict requirements that make it difficult for businesswomen to secure loans without men.  Nearly 68 percent of women borrowers required a male relative’s permission in order to qualify for any kind of loan.

The report further states that nearly all micro finance providers require clients to provide two male guarantors in order to access a business loan- and at least one of the guarantors should be unrelated to the borrower.  Finding unrelated male guarantors can be a challenge for Pakistani women micro entrepreneurs, who are often constrained by limited mobility and social barriers. Micro finance providers do not accept women guarantors for these loans.

The report proposes that by moving pragmatically to push the frontier of financial outreach to women, Pakistan can demonstrate its position as a global leader in micro finance. Investment in financial literacy and better-designed products, which can give women entrepreneurs the resources they need to grow their businesses, is one part of the solution. The report says that as a driver of micro finance policy, the State Bank of Pakistan can also further spread micro finance by setting standards for consumer protection of women borrowers, advocating for transparency in gender reporting and discouraging discriminatory practices and policies.

By Majid Shabbir
Secretary General Islamabad Chamber of Commerce & Industry
Moderator:  Business Support Organization Forum www.bsoforum.com