Women in Business in Pakistan: Participation, Financing, and Growth Potential

Women in Business in Pakistan

Women represent nearly half of Pakistan’s population, yet their participation in economic and entrepreneurial activities remains constrained by social, cultural, and financial barriers. While recent efforts have improved financial inclusion and access to bank accounts, women in business still navigate structural hurdles that limit their growth and scale-up opportunities.

1. Current Status: Women in the Workforce and Entrepreneurship

Despite making up around 48% of the population, women’s involvement in the labour market is limited with only about 24–25% female labour force participation.

Key figures:

• Female Labour Force Participation: 24–25% which is one of the lowest globally.
• Women Entrepreneurs: Women-led startups represent roughly 10% of the entrepreneurial ecosystem.
• Among SMEs, only a small fraction are owned or led by women reflecting a significant gender gap in business ownership.
• Female financial inclusion has risen sharply, with over 37 million women holding bank accounts as of 2025, and gender gaps narrowing.

However, much of women’s economic activity remains informal, home-based, or in sectors like agriculture, with limited formal business recognition and fewer opportunities for growth and finance.

2. Sector Engagement

Women entrepreneurs and business owners are increasingly active across diverse sectors:

E-commerce and digital platforms

Healthcare and education

Fashion, textiles, and handicrafts

Agri-business and livestock ventures

Services and consultancy

Notably, platforms like Daraz and Facebook Shops have empowered micro-businesses by lowering barriers to entry, enabling women to start businesses with minimal upfront costs.

3. Access to Finance: Progress and Gaps

Improving access to finance is critical for women entrepreneurs, yet challenges persist:

Progress:

• Between 2024–2025, 974,000 loans totaling over PKR 230 billion were disbursed to women entrepreneurs primarily through microfinance.
• Female microfinance borrowing has increased by over 200%, and women’s participation in SME and agricultural financing has also risen.

Challenges:

• Most financing remains concentrated in microfinance and entry-level segments; only a very small portion reaches larger commercial ventures.
• Women SMEs historically received a small share of overall SME lending around 3.2% of total SME finance.
• Despite improved financial inclusion, credit access for growth capital and scaling remains limited.

4. Challenges Faced by Women Entrepreneurs

Women in Pakistan face overlapping barriers that impede business growth:

Cultural & Social Constraints

Traditional gender norms and societal expectations restrict mobility and business engagement.

Access to Capital

Limited collateral, risk-averse lending practices, and smaller credit portfolios make scaling difficult.

Formalization & Networking

Women mostly operate in informal settings with limited access to business networks, mentorship, and professional training.

Workforce Barriers

Sectors such as agriculture and home-based businesses absorb many women, but these are often unpaid or under-valued activities.

5. Policy and Institutional Support

Recognizing these challenges, policymakers and institutions are introducing supportive measures:

National Women Entrepreneurship Policy – Proposed to expand financing, increase co-working spaces, boost women’s employment targets, and allocate SME Fund resources specifically for women entrepreneurs.

Banking on Equality Policy – SBP initiative aimed at narrowing the gender gap in financial inclusion and improving women’s access to institutional finance.

Women Inclusive Finance Programme – Supported by ADB and other partners to introduce gender-tailored services, digital solutions, and extended credit products.

6. Growth Potential and Future Outlook

Despite barriers, the growth potential of women-led businesses in Pakistan is substantial:

Women’s inclusion in entrepreneurship could drive job creation, boost exports, and strengthen economic resilience.

The rise in bank accounts and credit access shows structural financial inclusion trends that could support scaling once capital flows shift from micro to larger SME financing.

Digital platforms, e-commerce, and technology offer scalable avenues for women entrepreneurs, particularly where traditional business infrastructure is limited.