Are Pakistan's Women Entrepreneurs Being Served by the Microfinance Sector?

Fostering the entrepreneurship of women is important for Pakistan's economic growth and inclusion agenda, and access to financial services is an important component of starting and growing a business for women entrepreneurs. Most women?owned businesses are small, household?based cottage industries; microfinance products should be a natural source of start?up and working capital finance for this clientele. Microfinance portfolio data suggest that although Pakistan's sector has shown improvement in reaching women, it still lags its regional peers, only 59 percent of microfinance clients are women. The original purpose of this work was to determine whether women entrepreneurs have access to, and are using, microfinance loans as a source of finance for their businesses. However, the findings of the report go beyond the narrow objective of understanding whether microfinance institutions (MFIs) are reaching Pakistan's businesswomen. As the research unfolded, the evidence suggested that not only are women entrepreneurs not being served, but also that the outreach to women in general is potentially more limited than previously assumed and that the issues of consumer protection and responsible lending practices in Pakistan might merit further exploration. The report raises and addresses two distinct issues. First, some evidence suggests that women are often not the final users of loans, but rather are conduits to male household members. The report documents findings that suggest that the practice of passing on loans to male household members is potentially quite widespread; women may be bearing all the transaction costs and risks of accessing loans, but are not the final beneficiaries. Second, a very low proportion of female microfinance clients are entrepreneurs. The report explores why businesswomen in Pakistan may not be using microfinance products to meet their startup and working capital requirements, in spite of identifying access to finance as a key constraint to their business operations. The report focuses on products, services, policies, and other elements of the business model of microfinance in Pakistan that affect both demand for and access to microfinance by women borrowers, some of whom fall into the narrower category of entrepreneurs.

Bibliographic Details

Main Authors:	Safavian, Mehnaz, Haq, Aban
Format:	Publication biblioteca
Language:	en_US
Published:	Washington, DC: World Bank 2013-08
Subjects:	access to banking, access to banking services, access to credit, access to finance, access to financial services, access to funds, access to information, access to loans, affordable financial services, ATM cards, bank account, bank accounts, bank branch, Banking Regulations, banking sector, banks, beneficiaries, beneficiary, benefit payment, borrower, borrowing, borrowings, business activities, business development, business development service, business development services, business failure, Business Incubation, business management, business opportunities, Business risk, business support, business training, businesswomen, capital finance, capital requirements, cash flow, CC, Center for Women, Challenges for Women, checks, collateral, commercial banks, Community Development, consumer protection, Cooperative Development, credit discipline, credit histories, credit information, credit information bureau, credit information bureaus, credit officer, credit product, credit products, credit risks, credit transactions, current accounts, dated checks, deceptive practices, defaults, deposit, deposits, Developing Countries, disbursement, disbursements, discrimination, discriminatory practices, documentation requirements, economic activities, economic activity, Economic Development, economic growth, employee, employers, Empowerment, Enterprise Development, entrepreneur, entrepreneurship development, Exchange rate, exclusion of women, families, female borrowers, female clients, Female Entrepreneurs, female entrepreneurship, female population, financial access, financial exclusion, financial literacy, financial needs, financial outreach, Financial Products, financial service, financial service providers, first loans, formal loan, funding sources, Gender, gender divide, group lending, group lending programs, group loans, guarantor, guarantor requirement, guarantor requirements, guarantors, household investment, households, human capital, husband, husbands, individual loan, Individual Loans, inequalities, inequality, inflation, informal economy, Informal Saving, informal savings, installment, installments, insurance policies, Insurance Product, insurance products, insurance services, Interest payment, International Bank, International Development, International Finance, Investing, Key Challenges, Labor Force Survey, lack of access, lack of credit, lack of information, lenders, life insurance, Loan, loan amount, loan application, loan officers, Loan payments, Loan Portfolio, loan products, loan size, loan sizes, loans for women, loans for women entrepreneurs, loans from family, loans to individual, loans to women, market data, market segmentation, marketing strategies, married women, MFI, MFIs, Micro Credit, Microcredit, Microfinance, microfinance institution, microfinance institutions, Microfinance Lending, Microfinance Loan, microfinance loans, Microfinance Sector, microinsurance, minimum balance, mobile phones, new business, new businesses, Nominal interest rates, Nominal Yield, opportunity costs, Outreach, Outstanding loans, Ownership Structure, permanent residents, Personal guarantee, personal guarantees, personal savings, Policy Environment, portfolio quality, portfolios, profit margins, profitable business, promissory notes, rates of return, real interest, real interest rates, repayment, repayment capacity, repayments, returns, Rural Credit, Savings, savings accounts, savings groups, savings products, small business, small businesses, small loan, small loans, small savers, social barriers, sources of funds, startup capital, State Bank, supply of credit, Tax, transaction, transaction costs, transparency, urban areas, withdrawal, woman, women borrowers, Women Entrepreneurs, Women Entrepreneurship, women loan officers, working capital,
Online Access:	http://hdl.handle.net/10986/15929
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