Fact Sheet: Women in Startups and Business in Pakistan

Written by Mahnoor Basit.

Overview:

Women’s entrepreneurship has become a significant global trend, garnering substantial research interest over the past few decades. In Pakistan, women are making notable progress in the startup and business sectors, driving economic growth and social development. Despite numerous challenges, their resilience and innovation are creating a more inclusive entrepreneurial ecosystem.

As Pakistani start-ups continue to flourish, the role of women in this space becomes increasingly crucial. Various Pakistani incubators and accelerators in Pakistan are actively working to support and empower female entrepreneurs, ensuring they have access to the resources and mentorship necessary for success.

Key Statistics:

• Female Labor Force Participation: As of 2023, Pakistan’s female labor force participation rate is approximately 24%. This means that about 24% of women aged 15 and above are either employed or actively seeking employment. This is lower compared to global standards but shows gradual improvement. (World Bank Data)
• Women-led Startups: Women-led startups represent about 10% of the startup landscape in Pakistan, a relatively low percentage highlighting the need for increased support and resources. (Women Entrepreneurs and SMEs in Pakistan, International Labour Organization, 2020)
• Entrepreneurship Gender Gap: Only 1% of females are entrepreneurs compared to 21% of males. Moreover, according to Invest2Innovate’s report, gender disparities are prevalent in the startup ecosystem, and only 1.4% of all investments raised during the past seven years were based on women-run startups, further highlighting the gender gap.
• Entrepreneurial Activity: Out of over 5 million small and medium enterprises in the country (State Bank of Pakistan, 2022), only 8% are owned by women, with a significant presence in micro, small, and medium enterprises. (Asian Development Bank)

Women are actively participating in Pakistan’s growing startup ecosystem, particularly in sectors like technology, e-commerce, education, and fashion. Pakistani incubators and accelerators in Pakistan are beginning to provide platforms that foster female-led businesses, but challenges remain.

Challenges Faced:

• Access to Finance: Women entrepreneurs in Pakistan often face difficulties securing funding and investment due to traditional financial institutions’ risk aversion and gender biases. Limited collateral and lack of financial literacy impede access to loans and credit.
• Societal Norms and Cultural Barriers: Societal expectations and traditional gender roles in Pakistani society restrict women’s ability to engage in entrepreneurial activities. Moreover, family responsibilities and mobility restrictions also pose significant challenges.
• Lack of Networking Opportunities: Networking events and professional associations are often male-dominated, limiting women entrepreneurs’ access to mentorship and business connections.
• Regulatory and Legal Barriers: Complex regulatory requirements and lack of awareness about business laws hinder women from formalizing and scaling their businesses.
• Education and Training: Limited access to business education and professional training hinders the growth potential of women entrepreneurs.

Government Initiatives:

• Women Entrepreneurs Finance Initiative (We-Fi): In collaboration with international partners, We-Fi aims to enhance access to financial services for women entrepreneurs. We-Fi and IFC are helping to strengthen the venture capital ecosystem and increase funding opportunities for high-potential women-led businesses in Pakistan.
• Prime Minister’s Youth Business Loan Scheme: Offers low-interest loans to young entrepreneurs in Pakistan, with specific provisions for female entrepreneurs. The goal is to facilitate the establishment and expansion of women-led businesses.
• Kamyab Jawan Program: Provides both financial and technical support to young entrepreneurs in Pakistan, with a particular focus on encouraging women to enter the entrepreneurial sector.

Success Stories:

• Jehan Ara: President of P@SHA and founder of The Nest I/O, a technology incubator that supports young entrepreneurs in Pakistan, including many women-led startups.
• Kalsoom Lakhani: Founder and CEO of Invest2Innovate, which supports Pakistani start-ups through its accelerator program, with a strong focus on women-led startups.
• Sidra Qasim: Co-Founder of Markhor and Atoms, renowned for their innovative approach to footwear and entrepreneurship.

Notable Women-Led Startups and Entrepreneurs:

• Invest2Innovate (i2i): A venture capital fund that supports early-stage Pakistani start-ups, particularly those led by women.
• Sehat Kahani: A telemedicine platform co-founded by Dr. Sara Saeed Khurram and Dr. Iffat Zafar, connecting female doctors with patients across Pakistan.
• She Loves Tech Pakistan: A global initiative supporting women-led tech startups through competitions and accelerators in Pakistan.

Way Forward:

• Policy Advocacy: Advocate for policies that create a more enabling environment for women entrepreneurs, such as tax incentives, simplified registration processes, and legal support.
• Enhance Access to Finance: Increase funding opportunities for women-led startups through dedicated grants, low-interest loans, and venture capital.
• Provide Targeted Training and Mentorship: Develop more business training programs focused on skills development for women and establish mentorship networks connecting experienced entrepreneurs with aspiring female business owners.
• Promote Awareness and Change Social Norms: Run awareness campaigns to challenge stereotypes and encourage family and community support for women entrepreneurs. Moreover, highlight the success stories of female entrepreneurs to inspire others.

By fostering a supportive environment for Pakistani start-ups and young female entrepreneurs in Pakistan, we can drive a more inclusive and thriving economy. Pakistani incubators and accelerators in Pakistan must continue prioritizing women’s inclusion in the entrepreneurial space to ensure a more diverse and sustainable future.