Pakistani entrepreneurs say there is no appreciation for social entrepreneurship at the policy level in Pakistan, nor a mechanism to determine the social impact of business ventures
ISLAMABAD – Pakistan government has failed to acknowledge the potential of startups in generating economic growth in the country which is why the entrepreneurship eco-system in Pakistan remains largely ignored, experts highlighted at a seminar.
Entrepreneurs from a range of sectors, including microfinance, skills development and technology entrepreneurship said that there is no appreciation for social entrepreneurship at the policy level in Pakistan, nor a mechanism to determine the social impact of business ventures.
Investments are only considered feasible if they have commercial returns which makes it difficult to secure financing for social entrepreneurship and business models.
A large number of women in both urban and rural areas are also associated with home-based ventures. However, in the absence of additional financing, the scope of their business remains limited. Microfinance institutions can help plug this gap, by making their products attuned with the financing needs of home-based business ventures given the risks involved in pursuing a business venture.
City’s top business leaders, entrepreneurs, investors and academics attended the conference “Micro-business: The Gender Edge”, organized by Jinnah Institute in Islamabad.
Lack of access to finance and markets, skills development, and an investment culture that remains dismissive of business start-up potential were considered as key issues in Pakistan blocking the road to success for entrepreneurs. Traditional financing is beyond the reach of small-scale entrepreneurs due to collateral requirements, making it difficult for investors to commit.
“In India, startups enjoy tax exemptions for a period of three years, whereas startups in Pakistan have high tax and non-development costs associated with their ventures” which demoralizes young entrepreneurs.
Participants also noted that entrepreneurial successes are not widely celebrated in traditional media. In many case, individuals still seek the security of being in a job, instead of investing their skills in a venture that has high financial risks associated with it. Participants also observed that there is a huge skills and knowledge-based gap that despite a high supply of labor. The private sector can play an important role in bridging this gap by investing an innovative market oriented skills development program.
The policy dialogue concluded with a set of recommendations, stressing the need for a new definition for micro enterprises, establishing capital provisions and access to finances for entrepreneurs, and introducing skill building incentives into education curriculum.
Participants at the roundtable included leaders from p@sha, SEED Ventures, Investors Lounge, ACUMEN Fund, Paimona Works, KITE,Engro Foundation, WomenX, WordPL, WonderTree and Naya Jeevan.