In Pakistan, women’s active/acknowledged participation in economic activities is quite low as compared to other developing economies. According to Federal Bureau of Statistics, Pakistan’s Labour Force Survey of Pakistan (2005-2006) Three Quarter- Yearly Report, “Women have 13.5 percent Crude Activity (Participation) Rate (CAR), which is the percentage of persons in labour force to the total population and 19.3 Refined Activity (Participation) Rate (RAR), which is the percentage of persons in labour force to the population 10 years of age and over. Only .3 percent of the employers are women.”
At the CIPE’s business policy roundtable on Women Entrepreneurship Development held in January 2007, one of the major impediments for women entrepreneurs identified by the participants was the ability to access finance through banking channels. The reasons given were:
- Difficulty in providing collateral
- Lack of credit/business history
- Lack of integrated help credit plus business development services
In Pakistan, current maximum financing under microfinance is Rs 150,000 (US$1,875); another recommendation at the roundtable was that access to finance must be increased as microfinance alone is not sufficient.
Pakistan Banks Association, with the assistance of International Finance Corporation, has agreed to help Pakistani banks adopt sustainable banking principles that encourage expanded access to finance to under-served populations and more socially and environmentally responsible financing decisions.
A report published in Daily Dawn on 19 February 2009 mentions that IFC and PBA will develop guidelines, tools, and checklists to help Pakistani banks evaluate social and environmental risks, and develop innovative products, such as loans to women entrepreneurs, or insurance for those without access to financial services.
Once implemented, this policy reform will encourage banks to lend to women entrepreneurs beyond microfinance, fulfilling the long-awaited demand from women entrepreneurs.
Published Date: February 23, 2009