Daniya Ali Channa is a lawyer and also runs her startup Carbie.pk, selling burgers online from home on the weekend. She likes the work and plans to scale up as soon as the COVID-19 affected economy improves within a year or two. She would gladly welcome a good source of financing.
Channa admits she has little knowledge of accessing finance since she needed little investment to start her home-based business. She received the initial small investment from her family.
“I would love to have access to finance if it’s available and scale up my start-up,” she said. Channa could be one of the many women who benefit from the State Bank of Pakistan’s low-cost financing scheme for women entrepreneurs.
The State Bank is offering loans of up to Rs5 million at a low interest rates of 5% for women entrepreneurs. This could be one of the ingredients for a recipe that can help bolster Pakistan’s economy.
Dr Sania Nishtar, the adviser to the prime minister on social protection and poverty alleviation, says “Women have to be 10 times as good as men to have a seat at the table,” pointing towards the lack of opportunity for women in Pakistan compared to their male counterparts.
She added that the country’s women possess great potential but the country can’t progress or improve its economy unless men and women get the same opportunities.
According to a research paper, ‘Gender Inequality and Its Impact on Economy – A Case Study of Muslim Countries, published in the Pakistan Journal of Gender Studies, Muslim countries with better gender profiles also have better per capita incomes.
The data of 49 Muslim countries showed that the per capita income and Gender Inequality Index number had a negative relationship for all countries except oil-rich Saudi Arabia and Qatar. This revealed that countries with better gender equality have better a per capita income. The study recommended that gender equality can help economies perform better.
The State Bank has been one of the government organisation to have taken this seriously.
The Bank has recently increased the financing limit under its Refinance and Credit Guarantee Scheme for women entrepreneurs. The previous limit under this scheme was Rs1.5 million. The SBP said it has made this decision to encourage the participation of women in the economy.
The decision was taken in response to the feedback received from various stakeholders who found the previous limit insufficient to cover the financing needs of women entrepreneurs, the SBP said.
Under this scheme, the Bank provides refinance to participating financial institutions at 0% on their financing to women entrepreneurs at a maximum final rate of 5%. The SBP will give 60% risk coverage to the participating institutions.
Experts like Pakistan WE-NET (Women Entrepreneurs Network for Trade) President Yasmin Hyder say that such policies from a central bank and other government institutions are a very welcome step.
Such policies can help women can get key roles as it would encourage women entrepreneurs. More start-ups led by women today means more big businesses led by women in the future.
“The SECP has also asked all publicly listed companies to have at least one woman director in the board room. If there’s a woman in the board room then the polices will certainly be gender sensitive, like transport and daycare facilities,” Hyder said.
She added that the State Bank and SECP’s policies will help pave the way for women to have better opportunities, which in turn will result in a remarkable turnaround for the economy.
The World Bank’s former Pakistan country director in Pakistan, Ilangovan Patchamuthu, had said that Pakistan has the ability to increase its per capita income to $10,000 in 30 years by providing equal opportunity to women to participate in the economy.