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She had been supplying snacks to a tea shop at discounted rates since her husband’s death and realising her niche, had decided to establish her own tea shop. Fortunately, she met a female microfinance field officer who guided her to apply for a small group loan through a microfinance bank, instead of a hefty credit line, which would be sufficient enough to kick-start her business. “The banker advised me to first repay my previous loans and then apply for larger amounts gradually, till I could afford a hefty individual loan needed to expand my business,” Salma explained.

Salma followed the officer’s advice, and today she owns a well-established tea shop which she runs with her sons and offers exclusive catering services to as many as 10 clients per month. “Hopefully, with my savings and monthly profits, I would be free of loans soon,” she says.

Microfinance, a source of monetary services for entrepreneurs, has a great potential to increase women’s access to a wide range of simple financial products and services like microcredit, Karobar Qarz, insurance products and Ibtida-i-Karobar Qarz. It bridges the gender gap in the workforce, increases productivity, and creates employment opportunities for semi-literate or illiterate women, thus leading to better living conditions.

Salma isn’t the only woman who changed her life through entrepreneurship with the help of microfinance. Rehana, 50, earns her living by supplying 400 hand-made dolls per week to a contractor in a small town of Ghotki district. She has even employed 10 to 12 women from the neighbourhood, introducing social capitalism in the ecosystem. “I took loan from a microfinance bank and bought raw materials to stitch dolls. I repaid and applied for a second loan in a group. Since then, I’ve employed a few women to help because the demand has increased steadily. This way, their financial conditions have improved, while my business continues to grow,” she said.

Salma and Rehana are examples of a very small, budding segment of women entrepreneurs in Pakistan. Women entrepreneurship is crucial for our country’s economic growth and social inclusion agenda; however, the first and the most challenging step towards starting a business remains access to finance. This is where the role of micro-financing institutes (MFIs) and microfinance providers (MFPs) becomes extremely important.