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Access to finance for female entrepreneurs in Pakistan


Female entrepreneurs need support of the government, the private sector, and most importantly finance providers, as they strive to satisfy their entrepreneurial instincts, and establish sustainable enterprises necessary for ensuring an equitable and economically successful Pakistan, states ACCA Pakistans exploratory report Access to Finance for female entrepreneurs in Pakistan. The report was launched at a launch event at a local hotel in Lahore. The Chief Guest of the launch event was Mr. Shahid Rashid, Chief Executive SMEDA. The launch event was also addressed by Mr. Arif Masud Mirza, Head of ACCA Pakistan, Dr. Shella Javed Ikram, President Women Chamber of Commerce, Mr. Javed Iqbal Marth, Deputy Chief Manager State Bank of Pakistan and Ms. Zoya Aliem Khan, CEO Zoya Herbal Workshop. Dr. Afra Sajjad, Head of Education and Policy Development of ACCA presented the key findings and recommendations of the report. The report outlines access to finance as one of the main obstacles faced by female entrepreneurs as they try to establish a sustainable enterprise in the face of social and domestic constraints. The sources of seed capital for female entrepreneurs usually are personal savings, sale of personal jewels or loans from family and relatives. The growth potential of the enterprises is constrained by the unavailability of finance which mainly is due to reluctance of the female entrepreneurs to access bank finance. The major reasons for reluctance to access bank finance are fear of default, high interest rates, unpleasant experiences with the banks, difficulties in arranging collaterals and guarantors, lack of awareness of financing schemes, high risk averseness compared to men, social barriers and lack of an effective lobby. The report recommends that female entrepreneurs should adopt a proactive approach to learning about financing, maintain relevant and reliable accounting records and use the services of professional accountants, should consider refreshing or enhancing their accounting and finance skills by attending professional development courses of accounting and finance and build an effective lobby. The report concludes that finance providers are of the opinion that specific characteristics of femaleowned enterprises, for example innovative nature of the products, reluctance to hire the services of professional accountants, social and cultural constraints in establishing a working relationship with female entrepreneurs and inability to arrange a guarantor or collateral are reasons for reluctance of the finance providers to provide finance to female entrepreneurs. The report recommends that the State Bank of Pakistan will have to play a pivotal role in enabling greater access to finance for female entrepreneurs, by

encouraging banks to design and advertise products customised to their needs and constraints and encourage banks to allocate amounts in the total lending portfolio for lending to female entrepreneurs. It should also encourage implementation of the State Bank of Pakistan Prudential Regulations relating to cash flow based lending. Banks should incorporate developmental objectives and focus on outreach in their vision, strategy and actions. The report concludes that public-private partnership is needed to overcome the barrier of access to finance for female entrepreneurs.

About ACCA Pakistan ACCA Pakistan is a not for profit organisation established under section 42 of the Companies Ordinance 1984 and part of ACCA (the Association of Chartered Certified Accountants) the largest and fastestgrowing global professional accountancy body with 296,000 students and 115,000 members in 170 countries. We aim to offer the first choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. ACCA works to achieve and promote the highest professional, ethical and governance standards and advance the public interest. For Further Information please contact: Dr. Afra Sajjad Head of Education and Policy Development ACCA Pakistan Tel: 0300-8505415

For further information please contact: Dr. Afra Sajjad


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