ISLAMABAD Less than 25 per cent of Pakistan’s women entrepreneurs are microfinance borrowers as most businesswomen rely on savings, personal assets and family loans for capital, according to a recent study released on Thursday.
The study titled ‘Are Pakistan’s Women Entrepreneurs Being Served by the Microfinance Sector’ finds that discriminatory lending practices are pushing Pakistan’s women entrepreneurs to look beyond microfinance providers (MFPs) for loans. The report suggests that loans do not always benefit women borrowers. Men, who need loans, including those who have defaulted in the past, have begun to use women to access credit.
Between 50 to 70 per cent of micro-loans to women in Pakistan may actually be used by their male relatives. In such cases, women borrowers remain wholly accountable for these loans.
“Access to finance remains one of the biggest challenges for Pakistani women who want to start and grow a business,” says Rachid Benmessaoud, World Bank Country Director for Pakistan. “But strict guarantor requirements and the practice of offering business loan products exclusively to men have only widened the gap between businesswomen and the microfinance sector.”
Microfinance loans for businesses are largely unavailable to women entrepreneurs, especially unmarried women who are considered high-risk borrowers. MFP requirements make it difficult for businesswomen to secure loans without men as guarantors.
Nearly 68 per cent of women borrowers required a male relative’s permission in order to qualify for any kind of loan.
In addition, nearly all MFPs require women clients to provide two male guarantors in order to access a business loan, and at least one of the guarantors should be unrelated to the borrower.
source: Oman Tribune