Blaming the government for our own inefficiencies is the favourite drawing-room conversation of us Pakistanis. Similar is the case of unemployment, never have we pondered why we look for employment instead of creating employment opportunities.
Many would argue, starting something new in Pakistan with minimum resources is impossible because well “na-ehal hukumran” (incompetent leaders). The government has turned out not so incompetent here.
The truth is, Startups disrupt, and Regulations follow. Startups target untapped markets by providing digital solutions for existing businesses or introducing new projects altogether. These services are new thus no existing policies cover them. New policies are created with new innovations.
Issues faced by new startups
There is no denying that the law regime in Pakistan for years has been unfavourable for startups, which is why Pakistan lags behind its neighbouring countries in the tech and startup domain. A few issues are:
- Demands high regulatory costs that are unsustainable for startups.
- The lack of proper laws to incentivize foreign investors.
- An ineffective taxation process.
- The unavailability of proper digital payment infrastructure.
Notable disruptions by a few startups in 2021
However, the recent success of startups like Airlift, Zameen.com, Bazaar and Bykea validates the demand for digital services in the country. These startups’ success has also revived foreign investors sense of security in investing in local companies.
This year Pakistan saw a boom in global startup funding. Tech startup alone raised more than the previous 6 years combined, a 600% increase was witnessed.
As all of this shows, entrepreneurs and the companies they build are essential to revitalizing our economies. This urged the government to take necessary actions to facilitate and protect the startup ecosystem.
The current government seems to be somewhat in line with the trends of today.
“The best solution to empower the bulge of unemployed youth of Pakistan is small and medium enterprises (SMEs),” Asad Umar told startup Pakistan.
As per United Nations’ study, Pakistan needs at least 1.7 million jobs to be added every year. The government is well aware of the pivotal role the startup ecosystem plays in creating job opportunities.
If you’re an aspiring entrepreneur, the government’s got your back!
Let’s see some of the government initiatives that can support you on your journey to entrepreneurship.
Kamyab Jawan Program
In order to support youth and offer opportunities, the Government of Pakistan has initiated a flagship programme titled “Kamyab Jawan” focusing on education, engagement and employment. Six thematic areas were identified and projects were created by the Government under the umbrella of the Kamyab Jawan Program. This program is overseen directly by the Prime Minister’s office, while implementation takes place through various relevant ministries, organizations, associations and development sector stakeholders. These six initiatives are:
- The Youth Entrepreneurship Scheme (YES)
- Hunarmand Pakistan (Skills for All)
- Startup Pakistan under Kamyab Jawan
- Green Youth Movement
- National Internship Program
- Jawan Markaz
Youth Entrepreneurship Scheme (YES)
It envisages “Skills to Business”, wherein youth are offered subsidized loans. The scheme was launched in October 2019 and now has a pool of 21 collaborating banks in Pakistan.
- Age limit: 21–45 (18– 45 for IT businesses)
- Education requirements: Grade 10
- Payback period: 8 years (one-year grace period)
It is a 9 part form that requires general, personal and financial information along with some basic documents. The best part is the online portal for all applications. Guidance can be taken from the nearest branch of collaborating banks. The scheme functions in a 3 tier interest-free funding process.
| Tier | Loan Amount |
| Tier-1 | Rs. 100,000 to Rs. 1 Million |
| Tier-2 | Rs. 1 Million to Rs. 10 Million |
| Tier-3 | Rs.10 Million to Rs.25 Million |
Success stories among underprivileged masses
Though we didn’t see any notable business come out of this scheme, it surely empowered a huge number of people from low-income communities. It facilitated tailors, beauticians, shopkeepers, milkmen and many such workers to run their small businesses with ease.
Asad Kamal obtained a loan of Rs. 9 million for his building and construction business and invested in the construction of houses and fulfilled his dream of having a real estate office.
Meezan Bank and Retailo collaborate to provide Kamyab Jawan Financing to retailers.
The partnership is aimed at providing deserving retailers Kamyab Jawan financing in a Shariah-compliant manner to expand and support their small businesses.
Startup Pakistan under Kamyab Jawan
Prime Minister Imran Khan has taken the initiative of Kamyab Jawan startup Pakistan registration 2021 with the vision to develop a national startup ecosystem that provides one million young people training in entrepreneurship and launch 10,000 startups by 2023. It is a 5-step process with assistance provided at each step.
- Learn: It teaches the aspirant the basics of startups through online training in collaboration with different colleges and universities also offering classroom activities.
- Ideation: You are provided with businesses mentors to work on your idea.
- Incubation: You work on the idea to prepare a minimum viable product. The finances for this step are covered through YES funds with seed level funding by collaborating universities.
- Launch: Before launching the product, it is checked if the customer base is available and if the customer is willing to invest in that product. A customer lineup and a solid revenue model must be ready before the launch.
- Accelerate / Grow: The focus is on growth. Startup Pakistan brings industry leaders to help startups grow and penetrate into the industry rapidly.
“Startup Pakistan is a flagship initiative of Kamyab Jawan Program by the government which envisions to create jobs and economic activity in an inclusive, scalable, and sustainable way.”
— Asad Umar, Minister of Planning and Development
National Incubation Center (NIC)
National Incubation Center, is a Pakistan-based startup incubation program under a public-private partnership with the Ministry of Information Technology and Telecommunication, and other entities in Pakistan. Developed to further the vision of a Digital Pakistan, it is currently functional in Islamabad, Lahore, Karachi, Peshawar and Quetta.
To facilitate founders in scaling up, NIC provides them with a year-long training with these facilities:
- Co-working Space
- Mentorship and Coaching
- Startup Training
- Custom Designed Curriculum
- Commercialization Support
- Networking Opportunities
- Access to Investor and Grants
- Inclusivity and Diversity
The best part of NICs operating in Pakistan is that they offer zero equity-based incubation cycle for tech-based startups from the early to the growth stage to scale their businesses.
NIC backed startups that made an impact
NICs prove to be the best platform for startups since great successful startups developed in such incubation centres. All of the below-mentioned startups received huge amounts of global funding and recognition through awards.
- Digit Khata: It enables micro and small businesses to manage their bookkeeping using its web and mobile app.
- CricFlex: It is the world’s first patented wearable technology for cricketers who want to improve their game and make it to the mainstream.
- Mapalytics: It is one of the leading providers of 3D scanning services for construction, mining, archaeological and historical sites.
- Saving 9: It works to ensure the physical and mental safety of Pakistani citizens by enabling them with the tools, resources, and knowledge needed to save a life.
- Daastan: Daastan leverages technology to bring accountability and transparency to the book publishing industry by interconnecting key stakeholders through Pakistan’s premier publishing portal called Qissa.
- Deaftawk: It is bridging the gap between 466 million deaf people in the world and their communities by providing a real-time sign language solution at the user’s fingertips.
SECP Startup Portal
SECP is taking various initiatives to create an enabling regulatory framework for facilitating startups in Pakistan. These measures will attract local and international innovators.
- Enables ease of doing business
- Facilitates by making amendments in company act
- Educates by creating awareness outreach
Their startup process comprises of 10 steps being Idea, finding a co-founder, building a prototype, forming a business model, then a business plan, branding, registering the company, pitch deck, funding, and building up a networking and marketing plan.
“The SECP startup portal will be a gateway to information and collaboration hub for the facilitation and uplifting of the existing and future entrepreneurs to connect and excel”
— Shauzeb Ali, Comissioner SECP
Pakistan is considered to be the untapped potential market among international investors. The reason is the 63% young population, the deep penetration of the internet with 110 million internet users and increasing tech awareness. Problems, demands and opportunities have always been there, it is only now that we have started to address them.
Efforts by the State Bank of Pakistan to boost the startup ecosystem
This year a good number of initiatives were taken by the SBP that helped upcoming and operating startups to succeed.
SBP altered its regulations to facilitate foreign investments as convertible debt
When a renowned media publication “The Current” received funding from Google, there was no way to get the money home. When the issue was highlighted Fawad Choudhry and SBP president Reza Baqir facilitated the startup by introducing friendly regulations on foreign funding. This opened up gateways for many more global investments for Pakistan-based startups.
Revised Policy for Equity funding abroad
In order to facilitate the startups and attract direct foreign investments, amendments were made in equity funding regulations. The new policy would allow Pakistani Fintechs and startups to establish holding companies abroad. It would further facilitate exporters to establish subsidiaries or branch offices outside of Pakistan.
Banking on Equality: Reducing the Gender Gap in Financial Inclusion
The SBP is working on this gender mainstreaming policy that aims to bring a shift towards women-friendly business practices.
“The SBP is building market infrastructures and facilities that support women entrepreneurs in the country. For the SBP, entrepreneurship and especially female-owned businesses has held utmost priority.”
— Reza Baqir, President SBP.
SBP launches Licensing and Regulatory frameworks for digital Banking
The SBP has developed a licensing and regulatory framework for setting up digital banks in Pakistan. It offers two types of accounts:
- Digital Retail Bank (DRB): Focuses on retail customers
- Digital Full Bank (DFB): Deals with retail customers as well as business and corporate entities
This policy aims to enhance financial inclusion, provision affordable/cost-effective digital financial services to the unserved and underserved segments of society.
Things seem to be going in the right direction. However, it is unfair for the government to claim all the credit for the recent development in the IT sector. It has undoubtedly been the efforts of the Private sector which at some places has only been facilitated by the government.
“The only tangible govt policy for the IT industry seems to be their misdirected focus on allocation of large pieces of land for technology zones. In an era when everything is moving to virtual offices and remote work, this government is trying to support the IT industry by starting (or worse, rebranding) real-estate projects.”
— Umar Saif, Chief investment officer at Khudi Ventures and Chief Digital Officer at Geo/Jang Group
People have mixed remarks on Government’s share in IT development. However, a boom was witnessed in the tech sector and it would not have been possible if the Government didn’t advance its policies in accordance with the new-age trends.