PHOTO: CITI
“Microfinance banks have grown their reach in Pakistan, but they are expected to grow their capacities and capitalisation much faster in the next few years,” Soomro said, while speaking at a panel discussion at the British Deputy High Commission, Karachi.
The event was organised by Citibank N A, Pakistan (Citi) and the British Asian Trust (BAT) on completion of the first year of the Urban Youth Programme - a joint initiative to empower young entrepreneurs in Pakistan to develop and grow new businesses as part of the Citi Foundation’s Pathways to Progress initiative.
“The challenge for us all is to make them (microfinance borrowers) able to take risks. But this will happen when we share the risk with them and increase the lending period from six months or one year to a longer period of time,” he added.
Other panellists also underlined the importance of capacity building so that their businesses can grow much faster and contribute more in the economy.
The event’s attendees included representatives from the private, public and development sectors as well as young entrepreneurship graduates from the programme.
“The incubation centre provided me with all the necessary material that helped me run my business effectively,” commented Rabia Ashiq (24), who is one of the graduates of the programme and now runs her own academy.
However, later during the question and answer session, she said that despite having a running business she has been facing immense problems in obtaining a loan from microfinance banks because all the banks have demanded submission of property papers against the loan.
“Why would I need a small loan for my business if I had my own property?” she asked.
Pakistan has a growing labour force with 1.7 million young people reaching working age each year. However, four million young people between the ages of 15-24 years are unemployed and this number is set to rise to 8.6 million by 2020. That is a significant and growing number of young people who are at risk of social exclusion, income inequality and reduced prospects, and represents a serious challenge to Pakistan’s productivity and economic potential.
The programme empowered entrepreneurs aged 16-25 from low-income urban areas, to start and/or grow a business at a micro level. The young entrepreneurs are supported through a specially designed “incubator” facility, receiving training, small loans and mentoring support to start and/or grow their own business.
Published in The Express Tribune, November 25th, 2017.
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