Challenges in Financing Women Entrepreneurs in Pakistan: An Analysis

This report critically investigates the financing challenges faced by women entrepreneurs in Pakistan. It begins with an overview of the research, including its background, rationale, aims, objectives, and research questions. The report then delves into a comprehensive literature review, exploring existing research on the topic. The methodology section outlines the research approach, followed by data analysis and interpretation to identify key financial obstacles. The discussion chapter analyzes the findings, and the conclusion provides recommendations to address the challenges. The report highlights issues such as limited access to finance, gender bias, collateral requirements, and the impact on women's entrepreneurial activities. It also examines trends, the effects of financial constraints, and potential solutions to foster women's participation in Pakistan's economic growth. The research aims to provide guidance to government and relevant authorities to promote women entrepreneurs in Pakistan.

Financing challenges faced by
women entrepreneurs in
Pakistan

Table of Contents
TOPIC: “To critically investigate on the financing challenges faced by women entrepreneurs in
Pakistan.”.........................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Overview of Research.................................................................................................................1
Background of Research.............................................................................................................1
Rationale of Research.................................................................................................................2
Research Aim..............................................................................................................................3
Research Objectives....................................................................................................................3
Research Questions.....................................................................................................................3
LITERATURE REVIEW................................................................................................................4
CHAPTER 3: RESEARCH METHODOLOGY ..........................................................................11
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION ...................................................14
CHAPTER 5: DISCUSSION ........................................................................................................24
Chapter 6: Conclusion and recommendation.................................................................................27
REFERENCES .............................................................................................................................29

TOPIC: “To critically investigate on the financing challenges faced by women entrepreneurs
in Pakistan.”
INTRODUCTION
Overview of Research
In general term, an individual more interested in running small and own business by
considering number of risk and profit rather being working as a labour is known as Entrepreneur
In modern time, business person and entrepreneur with innovative ideas and business operations
are regarded as most economical and popular businessman (Ayesha and Kalim, 2012). Limiting
this study to concentrating on women businessmen is an obvious idea because of the absence of
women who work in Pakistan. It has bee discovered that due to large variation among the SMEs
and bank in Pakistan for women because they are mostly depended on men entrepreneur. In
Pakistan, it has been also discovered that total cost of leasing is also very high which become a
major difficulty for small or newly developed business. Companies unauthorized existence has a
negative affect on the exposure to public capital, but simply remain in the informal economy.
However, the usual practice of small companies to escape routine account holding is a real issue.
Women involvement in expanding and growing economy is termed to be most important for a
nation mainly there effective and more interest in different business activities and operations.
Although, in Pakistan women have been also started in developing and growing their self
business which makes them independent and contribute maximum for growth and development
of nation. The proposed research is very important because it will illustrate the problems that
stop women from engaging in their nation's economic growth (Sanjay, 2013). The main aim of
the particular research is to defined the entrepreneurial, technical and social problems which
hinder an individual women to be a part of business and take part in developing the Pakistan
economy. Provide government and appropriate authorities with guidance on how to take action
in this region to encourage women entrepreneurs in Pakistan and help develop women's trust and
confidence to participate
Background of Research
Entrepreneurship is seen as the development of advanced technologies in the organization
or the introduction of new goods by developing new companies. Women's entrepreneurship is
considered an important tool for enhancing overall economic growth and especially women
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liberation. These include the belief in actualization-worth, the freedom of women to make
decisions, opportunities for education and services, the authority to take decisions about their
private lives in and out of the home (Afza, Hassan and Rashid, 2010) Similarly women
entrepreneur have the right to carry out certain social reforms at domestic and international level.
It have been also determined that there is an immense improvement within women business
person in Pakistan due to development of more and more business related event and activities.
Thus women are consider to be valuable part of society and as a business women they support in
increasing and improving the overall economy. Financing issues are largely related to the
management and raising of resources, shortage of operating resources, etc. This research is very
helpful to understand the recent trends in Pakistan among women in business. In year 2018 the
GDP of Pakistan is $312,570 million which rises in the recent year and expected to $320,000
million. Access to internet teaching tools and seminar sequence leads to increased opportunities
for women. Networking opportunities and funding incentives support women entrepreneurs
achieve higher market performance. In Pakistan, there have been different jobs for women by
having a variety of digital technology. This also makes it easier to identify the different financial
problems that tend to affect female entrepreneurs in Pakistan. Women were not offered the
opportunity to come to terms in a company's upper management where vital choice is taken
mostly because of certain sexuality. Therefore, the fundamental purpose of such a study is to
illustrate the challenges and issues faced by female entrepreneur in carrying out their operations
and to provide suitable approaches so that potential business women can make the best possible
use of them to increase individual and economy productivity (Ahl, 2006).
Problem of Research
The main reason for selecting the respective topic for research is unequal opportunities
for women in Pakistan. There are not treated equally, not provided with equal freedom rights,
lack in education etc. Women running small business faces the difficulty while obtaining loans
as unevenly enforced lender rights have averted banks' risk and increased collateral requirement.
Women entrepreneurs usually face multiple problems, primarily due to money restrictions,
gender bias, low wages rates compared to men, high raw product prices, shortage of
entrepreneurship. In recent time, it is founded that Pakistan have the lowest number of women
business person all over the world. Karachi in Pakistan has one of the lowest degree of women
entrepreneurs in the world. The financial challenge faced by the women entrepreneur is mainly
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associated with the lack of personal capital which in turn is considered to be one of the major
source in order to carry out the operations of the business in a systematic and efficient manner.
Rationale of Research
The thesis researcher performed the specific research analysis due to the participant's
general interest. The investigator conducted the analysis although the current problem is
perceived to be funding problems addressed by women businessmen in Pakistan (Ahmad, 2011).
This allows to acquire wider awareness applicable to the specific field of research which help to
gain the better understanding. In order to more elaborate the selected topic researcher uses
thematic evaluation which support to make better and meaningful decisions.
Research Aim
“To critically investigate on the financing challenges faced by women entrepreneurs in
Pakistan.”
Research Objectives
 To understand the current and future trends of women entrepreneurs in Pakistan.
 To determine the various financial challenges which influence women entrepreneurs in
Pakistan.
 To determine the problems through which women go due to financial challenges faced by
them.
 To provide effective recommendation to overcome financing challenges faced by women
entrepreneurs in Pakistan.
Research Questions
 What do you understand by the current and future trends of women entrepreneurs in
Pakistan?
 What are the various financial challenges which influence women entrepreneurs in
Pakistan?
 What are the problems through which women go due to financial challenges faced by
them?
 What are effective recommendation to overcome financing challenges faced by women
entrepreneurs in Pakistan?
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LITERATURE REVIEW
The analysis of literature is an in-depth study of the prior inquiry. This is a description
and analysis of a particular area of study that helps anyone to interpret paper effectively and
continue the investigation (Amutha, 2011). It builds on the reasons for selecting particular
questions related to science. A successful analysis of literature should be the neglect of the
tendency to stress the importance of particular research program. In order to gain the more
derailed and elaborated information about the research topic by analysing different secondary
sources like articles, Journals, books and online sources.
To understand the current and future trends of women entrepreneurs in Pakistan.
According to Dodge and Robbins 2012, various marketing issues and capital acquisitions
are some of the most common problems which are faced by women at the starting stage of their
businesses (Xavier Gine, 2014). Similarly, administrating different resources and managing
various business components are consider to be the most negative issues which reduces the
working capability of entrepreneur and reduces the overall profitability of business in specific
time period. Bank account tends to remain at lower levels among women which in turn largely
influences the operations of the business. Only 13% women has access to finance as compared to
87% men. This in turn largely reflects the gender biasses system in Pakistan. The size of loan
which is detached to men is comparatively much higher when compared to women. Men workers
tend to earn higher when compared with the women which in turn largely influences women
entrepreneurs in Pakistan. Education bureaucracy and lack of training and education is
considered to be as the major challenge which in turn affects the operations of the business. The
businessmen who approved were presumably in the scope of the projects, while the disagreeable
did not know the Government. 30,8% of literate businessmen disagreed with it, but the main
reason behind this reaction lies in the reality that literate businessmen go into larger industries,
for which they already are well-known, most likely having trained or worked in them. Designers
who open shops naturally perfected their talents by taking a course in graphic design. By
contrast, this can be inferred that the two woman entrepreneurs have a challenge from launching
and maintaining their business going effectively and efficiently. Nevertheless, women
entrepreneurs with know-how can take advantage of the illiterate entrepreneurs owing to their
expertise and their knowledge. We also feel the society embraces we and offers you a morale
boost. Access to the job, economic opportunities and terming job creation are considered to be
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the major challenge associated with Pakistan. They also ascertained the facts that there is an
promoting the growth and development of women business person in Pakistan. Such
developments are primarily correlated with unemployment, employment levels, innovation,
international and media visibility, sex discrimination, gender inequality disparity and financial
incapacity, etc. are regarded as one of the key issues that, in turn, have a major impact on the
business activities. He also says that each woman wants to start a company, however in the
economy but they don't survive for longer period because of different reasons. Yet the most
important men readily accept business opportunities more than a women because of the dynamic
environment. Female entrepreneurs are among the primary factors to help solve business issues.
In the United States, the frequency of launching business venture is high, which was very
necessary for both the world economy development as well as increasing GDP (Hafizullah and
et.al., 2012).
It is important that business women must be given higher chance and must be encouraged
in Pakistan in order to grow and develop the south Asian region in recent time. It is also started
that women entrepreneur are supportive for economy and aid to lower the poverty and other
discrimination by themselves getting better job role or making new and innovative businesses.
Women entrepreneurs in this area are considerably low, and the reasons he mentions are the
shortage of schooling, resources and social pressures. This is another path out of discrimination
and significantly reduces the wage gap between men and women. It continues to contribute to
society as well as provides further job opportunities that cause economic growth. Religion rules
and regulation could even influence it in a certain cases. A study found that lack of
professionalism, lack of foresight and inadequate financial resources could result in increased
problems for business women when they choose for self-employment. It has been also
represented by author that for low success and survive of women entrepreneur within a country
like Pakistan is due to performing of dual duties such as caring for families and running business
at a single time. But in today's age, running a company is more valuable than working in an
institution and dealing with other limitations. Women are not motivated and appreciated for their
all efforts and attempts due to which their confidence level reduces and they are not able to
perform business activity in profitable and desired manner. As a result of creating awareness, it
seems there is a growing trend between women entrepreneurs is Pakistan. Woman's business is a
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path from suffering to wealth, reliance on justice. This has resulted in increased trust between
women, that in turn encourages females becoming professional life-oriented (Jones, 2004).
To determine the various financial challenges which influence women entrepreneurs in
Pakistan.
According to Ayesha 2012 this in effect primarily represents Pakistan's structure of
sexual biasses. Compared to females, the scale of the loan isolated from men is relatively much
larger. Men's staff generally earn more than women, that in turn affects females businessmen in
Pakistan to a great extent. Entrepreneurship is referred to as an effective business setting where
the individual tend to open their own business. They tend to risk their money in order to start a
particular business venture. Women entrepreneurs are one of the important source which helps in
solving business problems (Neergaard and Thrance, 2011). In addition to all these problems,
women experience male power problems, reliance on male colleagues for business transactions
and constraints socially imposed on women only. A study showed several variables as obstacles
for women businessmen, including family power, encouragement, level of skill and experience,
economic status, access to credit and help provided. Some of the main factors are listed
underneath:
Finance
This mainly explain the inclusion of the anti-availability of collateral and negative
mentality of financial firms regarding women businessmen due to this lack of finance for
women. Due to lack of financial resources in order to develop new venture cause them to desire
credit scheme from the different financial institution in Pakistan. It is the responsibilities of state
and country government to provide financing services and valuable assets to women those are
willing to set their own business. Types of financing mode for women are
Formal
This mainly includes debts transaction in which women used to borrow funds from a
specific lender that is needed to be paid again including a certain interest amount in particular
time period.
Informal
This type of financing includes exchange of money for a certain portion of business as a
ownership to a investor. Women can also make uses of their own funds to meet the business
requirement as per situation.
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Family Commitment
Women have to give proper time and care for their family so that in return family
member can support them in managing business (Palaniappan, Ramanigopal and Mani, 2012).
Thus many time woman business persons are not able to handle the situation and lead to
mismanagement within business situations. Somehow girls from business background are able
to get fully support and confidence from their family member as their parent believe that she
might be good while developing and running new business.
Workload
Another problem that research indicates is the workload or lengthy hours of work.
Operating time needed by another role of females differs for her other positions within the same
time frame. Long hours of work and semi-flexible patterns of employment result in higher
disputes of family and work responsibilities. Another thing that needs to be looked at is that it
contributes to stress that can trigger anxiety, pressure and irritation that exacerbates work and
family disputes between women entrepreneurs.
Social Constrains for Women in Pakistan
In Pakistan, business females are facing some economic and social limitations due to
which they are not able to succeed in business growth and economy development. The reasons
such as increasing population are reducing job growth opportunities due to which there is a huge
working age gap among women entrepreneur (Pareek, 2012). Several other social restriction are
improper facilities for education for girl child from early school days due to which they are not
able to understand the exact marketing situation. The main need of any business to be
competitive and productive in the present market is the presence of enough resources which will
support women to run their business activity in more desired manner. Thus, specific constraints
in Pakistan is due to absence of sufficient information due to lack of proper management school
and program for women and girls. On the other side the rapid changing structure of population
are also causing diminishing job opportunities for young girls and women.
The rate of opening new business venture is significant in USA which is very crucial for
the growth and GDP of the economy. This is one of the way out for unemployment and helps in
reducing gender pay gap. This helps in contributing to the economy and also creates higher job
opportunities which leads to economic development. In US, economy was influenced by $3
trillion, due to women owned business which in turn tends to create 23 million jobs.
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To determine the problems through which women go due to financial challenges faced by
them.
As per Dunn and Lian, 2006, determine that there are different factors which are regarded
as the hindrance in the context of women entrepreneur performance like lack of technological
knowledge, corruption, no support for family etc. Minimal support from family leads to a major
difficulty for the women to carry out its operations (Rao and SuriGanesh, 2011). Due to various
financial challenges tend to result in higher difficulty for carrying out the business and attain
goals and objectives of the company. Managing the cash flow of the business is considered to be
the major financial challenge for the business which in turn results in higher difficulty in paying
the bills which eventually leads to higher debts. Ul-Hameed, Mohammad, and Shahar, (2018)
argued that, not having sufficient capital for the business is considered to be the major financial
challenge for the women entrepreneurs. Women in Pakistan are discriminated and are not
sanctioned loan which in turn limits their access to the financial capabilities of the business.
Strapped budget is also a major financial challenge which in turn affects women entrepreneurs to
market the business to full potential. Micro finance sector is considered to be an effective source
to provide finance to the women in Pakistan. NGO credit programs, SME banking, banks, loans,
venture funding, letter of credit, personal savings, angel investors, debt financing, friends and
family are considered to be an effective source to access funds to carry out business in Pakistan
(Roomi and Parrot, 2008). From the study the author noticed that there are several major
differences between male and female company owners, they found a strong possibility that in
Pakistan women have considerable hidden potential for the future growth. Some of the most
common problems faced by women in Pakistan due to financial challenges are discussed
underneath:
Late payment of bills: This is one of the biggest problem that most of the women
entrepreneur face in Pakistan as they do not have enough funds or resources to pay off their
important bills. Women are not harsh and aggressive like men thus they are not able to collect
the outstanding amount for customer which gives the problem of shortage of funds. Many time
women does not have a proper financial support from family or other financial institution due to
late repayment of instalment or actual amount of bills.
Lack of Budgeting which lead to negative results: For running a successful and
profitable business in country like Pakistan women are needed to be good analyser. This help in
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proper allocation of funds to most favourable activity which generate most suitable income for
company in future (Singh and et.al., 2011). Due to lack of financial services in Pakistan Women
are not able to do proper budgeting and miss the important activities of business due to which
negative results are faced by company.
Limited funding: This is also one big issue faced by women in Pakistan because as bank
denied loan facilities due to gender and cultural biases. This lead to the problem of miss payment
of credit cards, increasing of debts etc. Business women have to use sufficient amount within
their activity which even frustrate them to close the business or hand over to other family
member.
Spending less money on necessities: In order to gain a successful business business
owner are required to make a proper spending on necessities such as marketing, promotion etc.
Women do not sufficient money so they are not able to spend more on these business necessities
which lead to problem of lower sales and at the end of year they do not have enough money to
cover the required spending (Tambunan, 2009).
To provide effective recommendation to overcome financing challenges faced by women
entrepreneurs in Pakistan.
According to Jean chatzky, there is a specific need to determine the challenges
encountered by business women and make appropriate solution for each specific issue in order to
increase the working ability of women's (Afza, Talat and Mohammad Osman, 2010). There are
various broad programme which are needed to be considered while framing future strategies that
could support in reshaping the whole communicative for women business owner. The author
believe that making equal and better opportunities for women in present business world will help
in bringing economic growth and development. There have been certain recommendation that
aid in resolving the challenges faced by business women in Pakistan are as follows:
 Access to finance: Safeguarding financing is among the biggest challenges that small
and medium-sized companies face. In order to develop the businesses need for women
government can develop smaller banks which will provide committed funds. This help
female entrepreneurs to obtain the required resources that is needed to expand and
prosper the running business.
 Business seminars for Women: It is noted that proper workshops and seminars must be
put on regular interval so that women investors cam come with each other to share the
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