Pakistan's Resilient Entrepreneurs Defy All Odds

Growing at more than 55% a year and collectively employing 41,000, the winners of Pakistan Fast Growth 100 contest were announced by Harvard-based Allworld Network last week. Of these 100 entrepreneurial companies, 70 also qualified for the Arabia500, putting Pakistan in second position after Turkey with 117 winners.



AllWorld was co-founded by Harvard Business School Professor Michael E. Porter, Deirdre M. Coyle, Jr., and Anne S. Habiby with the aim to bring visibility to growing companies in emerging markets to increase their odds of success. Any private, non-listed, company with rapid sales growth and an ability to demonstrate results with audited financial statements was invited to compete for a spot on the inaugural Arabia500 which includes Pakistan and Turkey in addition to the emerging economies of the Middle East and North Africa.

Each Pakistan entrepreneur ranked in the top 100 has grown an average of 40 percent annually between 2008 and 2010, created an average of 200 jobs per company, and is succeeding in industries from web technology to transportation, food to textiles, and construction to consulting, according to an AllWorld press release. With an average age of 42, nearly all of them plan to establish another entrepreneurial venture within the next two years.

Dr Abdul Hafeez Shaikh, Pakistan’s Minister for Finance, is quoted as saying that “the strong performance of Pakistani companies in Arabia500 illustrates that in spite of the challenges there continues to be strong business and investment opportunity in Pakistan. Pakistani companies in Arabia500 are surfacing new horizons for growth and quickening the pace of economic development and regional integration.”

The fastest growing company from Pakistan, E2E Supply Chain Management, grew at nearly 2000 percent between 2008 and 2010, with 2010 revenues above $50 million and 297 employees. Of the Arabia500 winners from 15 countries, E2E was the third fastest growing. Taking the second spot for Pakistan was Exceed Private Limited with a growth rate of 1,320 percent and 90 employees, and in sixth position overall on the Arabia500.

Pakistan also had the highest number of women entrepreneurs on the Arabia500, and Luscious Cosmetics of Pakistan topped the list of the fastest growing Arabia500 women entrepreneurs with growth of 392 percent and 82 employees.

Complimenting the Pakistan100 winners at the Awards Ceremony held in Lahore, AllWorld co-founders Deirdre Coyle and Anne Habiby urged the Pakistan100 to go further “When no one expected much, the Pakistan100 broke records for growth, transparency and competitiveness. They are the personification of what every country dreams of having. Now raise the bar higher and build Pakistan as a leading entrepreneurial nation.”



A recent World Bank report titled "More and Better Jobs in South Asia" said that 63% of Pakistan's workforce is self-employed, including 13% high-end self-employed. Salaried and daily wage earners make up only 37% of the workforce.

Even if one chooses to consider just the 13% who are high-end self-employed as entrepreneurs by choice, it puts Pakistanis among the most entrepreneurial people in the world.

The winners of Pakistan100 entrepreneurs are truly inspirational. They epitomize the Pakistani nation's extraordinary resilience and reaffirm that Pakistan's best days are ahead.


Related Links:

Haq's Musings

Pakistani Entrepreneurs Survive Downturn

Pakistan Leads in Entrepreneurship Indicators

Microfinance to Fight Poverty in Pakistan

Pakistani Entrepreneurs Summit in Silicon Valley

Social Entrepreneurs Target India, Pakistan

Urbanization in Pakistan Highest in South Asia

Start-ups Drive a Boom in Pakistan

P.I.D.E. on Entrepreneurship in Pakistan

Light a Candle, Do Not Curse Darkness

Pakistan Tops Job Growth in Pakistan

Do South Asian Slums Offer Hope?

IBA's Entrepreneurship Report Flawed

Comments

Riaz Haq said…
Entrepreneurship to stimulate economic growth in Pakistan:

..Wayne Beeson, supporter of Expeditionary Economics and other entrepreneurial economics initiatives, spotlights and recommends in his blog the entrepreneurship-based Expeditionary Economics model for Pakistan and similar countries to stimulate and sustain economic growth. He explains that Expeditionary Economics was put forth by The Kauffman Foundation in 2010 as an alternative to the largely ineffective international economic development policies of the U.S. State Department for the purpose of developing economic growth in areas where the U.S. is involved in counterinsurgency missions or disaster relief. Economic growth is vital for the stability of countries challenged by war and disaster. Mr. Beeson agrees with The Kauffman Foundation that entrepreneur-led economies are a proven model for developing economic growth.

“Entrepreneurship positively impacts the economic well-being of individuals, families, and nations, and Expeditionary Economics recommends entrepreneurship as the foundation of our international economic development policy and endeavors,” says Mr. Beeson. He notes that Professor Looney’s study on applying Expeditionary Economics to the economy of Pakistan to stimulate economic growth is not only a model for Pakistan, but also a model for other countries facing similar challenges.

“Professor Looney’s study is the beginning of a plan of action to systematically implement entrepreneurial activity in a distressed economy in which the U.S. is committed to providing assistance for various reasons. If the U.S. can be successful in helping create prosperous, self-reliant economies, it is a win-win outcome. I individuals, families and nations prosper and support democratic reforms where the people of a country own their own economy and government, and the U.S. wins by having friends in the international community who support rather than threaten U.S., because they support our values and ideals,” explains Mr. Beeson.

Professor Looney’s paper can be downloaded at expeditionaryeconomics.org., or from this news release.


Read more: http://www.timesunion.com/business/press-releases/article/Wayne-Beeson-Recommends-Expeditionary-Economics-3437021.php

http://www.foreignaffairs.com/articles/66207/carl-j-schramm/expeditionary-economics
Riaz Haq said…
Here's an excerpt from Newsweek Pakistan on women entrepreneurs:

What inspired you to start your own businesses?

Roshaneh Zafar: I never thought I’d start my own business at 27, but I met [Grameen founder] Dr. Muhammad Yunus at a conference and he changed my life. He talked about women’s economic empowerment and how a simple loan could change lives. I spent time with him in Bangladesh and he encouraged me to help Pakistani women [with microfinance opportunities]. He said if I fail, I could blame it all on him.

Ambarine Bukharey: I started gemstone exports in 1989 and never thought this would become a serious business. I was the first woman in this line, and I think so far the only one who’s also mining. When I first went out in the markets in Peshawar to buy gemstones, all these men would just stop and stare and laugh at me. They were highly skeptical. But now we’re one big happy family. Now I can sit with five or six Pathans in the middle of the night examining stones. I feel safe now, because they look after you like family.

Sajida Zulfiqar Khan: I started this furniture business after my husband died. People here and abroad have been very responsive to our work.

Nasreen Kasuri: I’m afraid my story is not as glamorous as the rest. I started out in 1975 when my own children were starting school. I looked around for the right nursery school in town, and felt that none of them was suitable for children aged 2 and 3. So I started my own Montessori in Lahore. After that it was just a series of fortunate coincidences.

Zeenat Saeed Ahmed: I was bored with marriage. So I started making little gifts and set up a small boutique store, Sehr. Later, I set up a garment factory and had 600 people working for me at one time. In 1993 I went bankrupt, so I closed down and also got divorced the same year. It wasn’t a happy time. When I ran out of whatever little money I had left, I decided to start Taneez. I started from home, and when we did our first store in 2000 it was an instant success.

Did you face any resistance from your families in striking out on your own?

Khan: A little, but it gets better every day.

Kasuri: I didn’t really face any resistance, not in the beginning. They thought this was just a hobby which would keep me busy and out of mischief.

What do you consider your first achievement in the profession? When did you realize you had made it?

Zafar: It took me 10 months after setting up Kashf to organize women in groups and encourage the concept of women working at home or in the community. There were these five women who were the first risk takers, who took Rs. 4,000 to start their business some 18 years ago. It was just incredible when the first repayment installment came in and then the next; these women had begun to feel confident because they could invest in a business, earn and actually be able to repay their loans.

Bukharey: For me it was being able to break through the culture of the male-dominated mining market and become accepted as an equal.

Khan: My business is pretty simple. Every woman in Khyber-Pakhtunkhwa told me this would be a difficult business, dealing with labor and everything. But it has worked and I’m pretty happy about it.

Kasuri: What I started was very small. For the first few years it didn’t make any money, and that didn’t matter. I was doing my own accounts. Every time I was short of money I would put some money in and keep it going. When it did finally make money I was quite excited, except that real accountants told me I hadn’t made any money. They put in the amortization and depreciation and told me I had actually lost money. So it took me some time to figure out that when you think you have made money, you haven’t really.

Ahmed: When I got my first check something like 35 years ago, I was pretty excited...


http://www.newsweekpakistan.com/features/946
Riaz Haq said…
Here's a Bloomberg report on Pakistan's plans for small cap company shares market:

Pakistan may set up a stock exchange for small companies to raise capital as part of government plans to provide more financing channels for Asia’s fifth-smallest economy and as initial public offerings dry up.

The Securities & Exchange Commission of Pakistan may form the exchange or create a board within the bourse, Muhammad Ali, chairman of the regulator, said in an interview at Bloomberg’s office in Karachi yesterday. There haven’t been any listings on the Karachi Stock Exchange this year after four companies went public in 2011, according to the exchange’s website.

“So much creativity dies in this country without seeing the light of day because we can’t provide vehicles for financial capital,” said Ali, 43. “Unless this happens we won’t achieve corporatization, documentation of the economy or tax collection.”

Prime Minister Yousuf Raza Gilani’s government is seeking to get more revenue from an underground economy that employs more than three quarters of the nation’s 54 million workers and is worth as much as 50 percent of the $200 billion official gross domestic product. There are 60,000 registered companies and 3 million small- and medium-sized sole proprietors and partnerships, most of which are part of the underground economy.

The Karachi Stock Exchange 100 Index (KSE100) has surged 24 percent this year after the government eased rules on a capital-gains tax and demand for energy and building materials bolstered company earnings. The measure was little changed at 14,019.56 at 10:03 a.m. local time.
Huge Potential

The stocks gauge, which slid 5.6 percent in 2011, is trading at 6.9 times estimated earnings, the lowest valuation in Asia, reflecting the country’s struggles to cope with militant attacks and political instability. The BSE India Sensitive Index trades at 12.4 times forward profit after gaining 3.1 percent this year.

“A platform for small businesses will allow investors to tap the potential of growing companies,” Farid Khan, who manages 65 billion rupees ($706 million) in stocks and bonds as chief executive of ABL Asset Management Co. in Karachi, said by telephone yesterday. “However, only selective institutions should be allowed to invest in these companies because these are higher risk concerns.”

Companies may be segregated into categories with rules allowing only larger investors to trade in riskier stocks, said Ali, who joined the agency in December 2010.

His commission has recommended changes in tax rates and also plans to amend the company law by next year to introduce different reporting requirements for smaller businesses that list on the exchange. There are 591 companies listed companies.
Bigger Tax Net

The SEC has also proposed that the 35 percent corporate tax rate be reduced and the 25 percent levy paid by unlisted businesses be raised to encourage public share offerings.

“If we have this fiscal change and a new law that differentiates between reporting requirements based on the size of the company, businesses will be corporatized in the country and that’s the way forward to document the economy and broaden the tax net,” said Ali, a former broker who led Indosuez W.I. Carr Securities in Karachi for six years.

Pakistan’s ratio of tax to gross domestic product was 8.6 percent in June, one of the world’s lowest, according to Macro- economic Insights in Islamabad. Only 25 percent of the economy is taxed if the undocumented sector is taken into account, Sakib Sherani, the chief executive officer of the economic research company, said by e-mail last month
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http://www.businessweek.com/news/2012-05-24/pakistan-may-set-up-small-company-exchange-sec-chief-says
Riaz Haq said…
US AID promoting private equity investment in Pakistan's SME sector, reports Express Trib:

..$80 million, earmarked by the Obama administration under the Kerry-Lugar-Brahman Act for the Pakistan Private Investment Initiative

Crowding-out of the private sector from credit channels due to reckless government borrowing has provided a unique public relations opportunity to the US. The US has said it will offer loans ranging from $500,000 to $5 million to small and medium sized business in Pakistan, to help the latter expand and create jobs.

In total, $80 million, earmarked by the Obama administration under the Kerry-Lugar-Brahman Act for the Pakistan Private Investment Initiative, will go towards providing cheaper financing and equity to small and medium enterprises (SMEs) in Pakistan.

“The United States Agency for International Development (USAID) will provide up to $24 million for an equity fund, and fund managers will be required to match the requested funding to take the size of each equity fund to at least $45 million,” said Theodore Heisler, the project manager and senior economic growth advisor to USAID.

Heisler said that co-investment was essential in bringing the size of each fund to a level where it can cover operating expenses. The US intends to create at least three funds, but is, as yet, noncommittal to the total number. US authorities are on the lookout for good fund managers, and the availability of quality managers will determine the numbers of the funds, officials have said. During the last fiscal year, the federal government borrowed Rs1.77 trillion to finance the budget deficit. The State Bank of Pakistan has already warned that due to increasing government borrowing, there is little credit available for the private sector to grow.

“Having access to finances is a challenge for SMEs, as there is little equity and debt available for the sector,” said Heisler. “The longer term goal is to help expand the market for private equity investment and provide money that is not available through banks and other international lending agencies,” he added. He said the real job growth potential lies in the SME sector, as the corporate and public sectors cannot create unlimited jobs.

Heisler said each fund will have a 10-12 year lifespan. Individual investment sizes will range from $500,000 to $5 million, but could vary depending upon requirements. The initiative has been modelled on the Polish American Enterprise Fund, which was started with $140 million and has now grown to a multi-billion dollar fund.

Heisler said the US is looking to create a private equity industry in line with global standards, as there is hardly any private equity investment fund in Pakistan. He said the other purpose was fetching foreign investment through co-investment, as investment in Pakistan is dwindling.

The US is currently looking for fund managers who have a successful history, and Heisler said that both local and international fund managers have expressed interest in the project.

To a question whether Pakistani fund managers have expressed reluctance due to doubts over long-term commitment issues with the US, the US embassy replied “we believe there will be substantial interest from local, regional and international investors”.

It further said that “the US government designed the Pakistan Private Investment Initiative after a year of research and consultations with numerous stakeholders, including the Pakistani private sector and regulatory authorities.” It added that USAID will structure the funding to ensure that it is sustainable.


http://tribune.com.pk/story/442469/credit-crunch-as-banks-turn-their-backs-on-private-sector-us-steps-in/
Riaz Haq said…
Here's a Bloomberg story titled "Pakistan, Land of Entrepreneurs":

On a warm Sunday morning in November, Arif Habib leaves his posh home near the seafront in southern Karachi and drives across town in a silver Toyota Prado SUV. About half an hour later, he arrives to check up on his latest project: a 2,100-acre residential development at the northern tip of this city of 20 million. He hops out, shakes hands with young company call-center workers who are dressed for a cricket match, and joins them at the edge of the playing field for a traditional Pakistani breakfast of curried chickpeas and semolina pudding. After a quick tour of the construction site, he straps on his leg pads, grabs his bat, and heads onto the field. “The principles of cricket are very effective in business,” says Habib, 59. “The goal is to stay at the wicket, hit the right balls, leave the balls that don’t quite work, and keep an eye on the scoreboard. I feel that my childhood association with cricket has contributed to my success.”

Habib, who started as a stockbroker more than four decades ago, has expanded his Arif Habib Group into a 13-company business that has invested $2 billion in financial services, cement, fertilizer, and steel factories since 2004. His group and a clutch of others have become conglomerates of a kind that went out of fashion in the West but seem suited to the often chaotic conditions in Pakistan. Engro (ENGRO), a maker of fertilizer, has moved into packaged foods and coal mining. Billionaire Mian Muhammad Mansha, one of Pakistan’s richest men, is importing 2,500 milk cows from Australia to start a dairy business after running MCB Bank, Nishat Mills, and D.G. Khan Cement.

These companies have prospered in a country that, since joining the U.S. in the war on terror after Sept. 11, has lost more than 40,000 people to retaliatory bombings by the Taliban. Political violence in Karachi has killed 2,000 Pakistanis this year, and an energy crisis—power outages last as long as 18 hours a day—has led to social unrest. Foreign direct investment declined 24 percent to $244 million in the four months ended Oct. 31, according to the central bank.

At the same time, some 70 million Pakistanis—40 percent of the population—have become middle-class, says Sakib Sherani, chief executive of Macro Economic Insights, a research firm in Islamabad. A boom in agriculture and residential property, as well as jobs in hot sectors such as telecom and media, have helped Pakistanis prosper. “Just go to the malls and see the number of customers who are actually buying in upscale stores and that shows you how robust the demand is,” says Azfer Naseem, head of research for Elixir Securities in Karachi. “Despite the energy crisis, we have growth of 3 percent.”

Sherani of Macro Economic Insights estimates the middle class doubled in size between 2002 and 2012. “Those who understand the difference between the perception of Pakistan and the reality have made a killing,” Habib says. “Foreigners don’t come here, so the field is wide open.” The KSE100, the benchmark index of the Karachi Exchange, has risen elevenfold since mid-2001. Shares in the index are up 43 percent this year alone. Over the past decade, stocks have been buoyed by corporate earnings, which were bolstered in turn by rising consumer spending.
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Today, Habib has 11,000 employees and annual revenue of 100 billion rupees. He plans to expand into commodities trading and warehousing. “I’ve created all my wealth in Pakistan and reinvested all of it here,” says Habib, who drives himself to his cricket matches and is never accompanied by security guards. In 1998, when Pakistan’s share index fell to a record low after the government tested nuclear weapons, Habib bought shares even though “people thought I was mad.”...


http://www.businessweek.com/articles/2012-11-29/pakistan-land-of-entrepreneurs
Riaz Haq said…
Here's an ET blog post taking media to task:

A recent article in Wired, Danger Room highlighted the resurgence of the US drone campaign in Pakistan. While it focuses on the war, a lot was left untold about the nation’s story that is as heartening as it is heartrending, and as inspiring as it is seemingly dismaying.
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The story of four of these start-ups, that launched in 2012 speak volumes about the resilience, commitment and resourcefulness of its founders.

The first is Vital Agri Nutrients, a young, agricultural Research and Development focused company that is working on developing innovative products for farmers. It has had some recent breakthroughs with their micro-nutrients and soil amendments which are currently in field trials. Given the expected shortage of water and growing prices of fertilisers world-wide, the company and its products present a promising opportunity for small and large farmers to improve the crop yield and lower their input cost per acre by employing soil amendments that help with more efficient use of fertilisers and water in plants.

Next, four young entrepreneurs at Eyedeus, aided by decades of joint research in computer vision, have developed technology that enables mobile devices to have eyes and intelligently process real-world imagery using an increasingly powerful mobile processors. Unlike the cameras on mobile devices that just allow ‘dumb’ recording of images or videos, Eyedeus technology allows developers to augment the reality around users. The company’s first product, called ‘Groopic’ (beta available on the AppStore) is already getting rave reviews. Groopic allows group pictures to be taken in a way never before possible. The person taking the picture can now be part of the group picture, go figure!

Eyedeus, by the way, is part of a full-service technology incubator called Plan 9, that’s a visionary initiative of the government of Punjab, and it hosts at least a dozen other start-ups alongside Eyedeus, working on equally innovative products and services.

Similarly, Invest2Innovate is another accelerator that is supporting at least five entrepreneurial ventures focused on businesses with a large social impact.

Third is a new age production house called JugnooMedia, developing interactive, digital musical toys for mobile devices with an aim of providing toddlers and young children new avenues of learning that are more fun and effective than the traditional, classroom teaching. The demos of their first title are very impressive and the company has announced that it will be released on the Apple AppStore and Android Marketplace soon.

And finally, there is BLISS – a social venture that is aimed at improving the livelihood of women in Pakistan alongside educating them. BLISS has already done a pilot program in a small village of Pakistan where women were taught embroidery skills alongside formal school education in the first phase. In the second phase, BLISS provided the same women an opportunity to co-op with the company and develop handbags designed by professional designers which were then marketed by BLISS through its online store as well as an impressive list of global brand ambassadors. The women who made the bags got the lion’s share of the revenue from those sales and the rest of the money is being used to sustain the operations of the organisation and scale the program.
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The next time a story is told about the problems Pakistan is having with the political instability, corruption, energy shortage and terrorism the world must know, that to the same land belong some of the best, battle-tested and inventive entrepreneurs working on shaping the future of the world!



http://blogs.tribune.com.pk/story/15611/pakistan-more-than-just-drones-blasts-and-terrorism/
Riaz Haq said…
Here's Daily Times on US-Pak cooperation in human capital development:

* Grant to help researchers turn their research into commercially viable projects with private sector partners

* Symposium on ‘Economic Growth through Technology Transfer’ kicks off

ISLAMABAD: US Ambassador Richard Olson has announced new funding for Pakistani researchers during the first Pakistan-US Science and Technology Cooperation Programme Symposium on “Economic Growth through Technology Transfer”, which started at the National University of Sciences and Technology (NUST) on Thursday.

The two-day symposium is being jointly organised by the Higher Education Commission (HEC), Ministry of Science and Technology (MOST), US Department of State, US Agency for International Development and US National Academy of Sciences. The main objective of this academic activity was to introduce concepts of technology transfer and foster new interactions between research projects and the private sector, enhancing translation of research across these domains.

The participants included principal investigators, private sector, government representatives and universities. Delivering the keynote address, Ambassador Olson said that international science and technology cooperation is essential in addressing global challenges. Examples of research cooperation that can improve lives include more efficient water treatment to conserve and reuse wastewater; systems that rapidly detect deadly, drug-resistant tuberculosis; and solar water-heating systems for remote, rural areas, he said.

Ambassador Olson explained several other ways that the United States promotes scientific cooperation with Pakistan. He also announced new funding for Pakistani researchers to turn their research into commercially viable projects with private sector partners. This year’s Pakistan-US Science and Technology Symposium mark the 10-year anniversary of the Pakistan-US Science and Technology Cooperation Agreement and highlights a new focus on economic growth through scientific cooperation.

The two-day symposium brings together American and Pakistani researchers, universities, research institutions, government officials, and entrepreneurs to help build partnerships between researchers and private sector. The sessions include hands-on workshops on establishing private sector partnerships, intellectual property, and how to “sell” a business idea to potential investors. Earlier in the inauguration session, HEC Member Dr Nasser Ali Khan informed that over the last decade, the United States and Pakistan have jointly contributed $38 million to fund 73 Pakistani-US scientist-led research projects among 40 different institutes and universities in both countries. He also shed light over the decade-long achievements of higher education sector.

The Pakistan-US Science and Technology Cooperation Programme will sponsor two competitive seed grant programmes in 2013: “Innovate! and Collaborate”. Under these programmes, researchers can apply for seed grants of up to $15,000 starting in summer 2013. Application details will be available in summer 2013. HEC chairperson Dr Javaid R Laghari, Ministry of Science and Technology Secretary Akhlaq Ahmad Tarar, National University of Science and Technology Islamabad Rector Engr Muhammad Asghar and University of Agriculture Faisalabad Vice Chancellor Prof Dr Iqrar Ahmad Khan were also present on the occasion.


http://www.dailytimes.com.pk/default.asp?page=2013\02\01\story_1-2-2013_pg11_1
Riaz Haq said…
Here's a San Francisco Chronicle story on an e-commerce entrepreneur in Pakistan:

Waqas Ali grew up in a small town in Pakistan called Punjab.

Ali studied physics while attending a university in Lahore, but eventually dropped out when he was inspired by a group of five craftsmen making handmade shoes in his home town, Ali writes on Medium.

So he started working on an online shoe store called HOMETOWN because he wanted to help those craftsmen build a sustainable business.

He ended up returning to Punjab to meet with a "shoe master" named M Hussain, who would become the official shoemaker. He got his friend Sidra Qasim to come on board as a co-founder, and in November 2012, he secured a $10,000 seed fund from P@SHA Social Innovation Fund.

The two eventually moved to Lahore so they could get in touch with designers, find high quality raw material, and start building the website.

But it wasn't easy. They were living in a hostel and using a Kentucky Fried Chicken restaurant as their office.

After about for months, Ali and his team were able to make super comfortable and lightweight shoes.

But selling those shoes proved to be more difficult than they expected. They spent about 60% of their money on building inventory, there wasn't much left for marketing and operations.

Since they were strapped for cash, they simply interacted with potential customers both online and offline. When they sold their first shoe, Ali wrote a handwritten letter to the customer, and he still does that to this day.

"Honest communication, delivering on promises, and most importantly showing human side of our business helped us increase both our traffic and sales," Ali writes.

In August 2012, Google and Punjab's government proclaimed HOMETOWN as an "Innovation Hero."

Now, Ali and his team are part of a Punjab-based incubator. Ali was also recently selected to be an Acumen Fund Pakistan Fellow.


http://www.sfgate.com/technology/businessinsider/article/What-It-s-Like-Launching-An-Ecommerce-Startup-In-4242765.php

Riaz Haq said…
Here's a PakistanToday report on SBP support of small businesses:

The State Bank of Pakistan's (SBP) Credit Guarantee Scheme (CGS) has helped small enterprises and farmers to access Rs 2.83 billion in bank financing over the last 18 months.

The Scheme (CGS) has facilitated financing in 105 districts across the country with 85 percent of loans provided to previously un-served/under-served clients in rural areas, of which 81 percent were subsistence farmers, said a SBP press statement on Wednesday.

Similarly, 91 percent of the loans under the Scheme were provided to small businesses with less than five employees of whom 90 percent were
Sole proprietors the statement added.

Under the CGS, banks also focused on serving the lower end of the commercial banking market through smaller loans, with an average loan size of Rs 390,000 for agriculture and Rs 2.1 million for small enterprises. Specific to the needs of the clients, the durations ranged from less than one year to three years.

The Scheme through its support to previously un catered small rural enterprises is likely to enhance economic opportunities and increase employment in the rural areas of the country.

The Technical Committee of the bank during its annual review of the Scheme observed that despite the extensive geographic spread and a focus on under-banked segments, the participating banks demonstrated prudent lending practices reflected in an infection ratio of only 2.91 percent for agriculture and 1.07 percent for small enterprise loan portfolios, which are much lower than the industry averages.

It shall be noted that the CGS is monitored by the Technical Committee drawing membership from the UK's Department for International Development (DFID), SBP and the Pakistan Banks Association (PBA).

The Scheme is working in tandem with nine banks including big five banks which were selected after due screening by the Committee.


http://www.pakistantoday.com.pk/2013/02/20/news/profit/smes-farmers-get-rs-2-83-bln-financing-under-cgs/
Riaz Haq said…
Here's Financial Times on Pak entrepreneurs flocking to England:

The number of wealthy entrepreneurs entering the UK on the government’s visa programme has doubled in the past year, boosted by people from China and Pakistan setting up businesses in London.

‘Entrepreneur visas’ allow foreign nationals to start a company and earn a fast track to UK citizenship, as long as strict criteria on access to funding, job creation, or business success are fulfilled.

London’s growing importance as a global tech hub, and the increasing difficulty in obtaining the right to work in the UK by other means, has hugely increased the interest in entrepreneur visas over the past year, say experts.

“Entrepreneurs from around the world are attracted to some of the UK’s fastest growing business sectors, such as the rapidly expanding IT start-up sector, which is centred around ‘Silicon Roundabout’ in London,” said Simon Horsfield, partner in the private wealth team of Pinsent Masons, the international law firm.

Take-up of the visas has increased sharply in recent years, jumping to 462 in the 12 months to the end of June 2012, compared with 199 in the same period a year earlier. In 2008 just 11 were issued, according to figures obtained by Pinsent Masons.

American entrepreneurs represented 22 per cent of successful applicants in the year to end of June. Chinese foreign nationals accounted for 11 per cent of the total – rising by 500 per cent to 54 applications last year – while entrepreneurs from Pakistan accounted for 16 per cent.

Mr Horsfield said unlike investor visas which have been criticised for being used as a quick route into the UK for wealthy investors, entrepreneur visas are not about people ‘buying’ a fast track to UK citizenship.

“To satisfy the visa criteria, applicants have to create jobs and prove that they will make a long-term contribution to the UK economy,” he said. “These entrepreneurs can be hugely beneficial to the UK economy. They’ll bring fresh ideas, create new jobs, and provide a boost just when the economy needs it.”

James Badcock, head of the Geneva office at law firm Collyer Bristow, said increasingly tight rules on immigration had boosted the popularity of specialist visas, such as entrepreneur or investor visas.

“Clients considering an entrepreneur visa are often those who are already entrepreneurs in their home country but are concerned about the stability or state of the political regimes where they live,” said Mr Badcock.

He said the visas were increasingly becoming popular among Asians because of the huge influx of Asian investment to London.

If after three years, holders of entrepreneur visas can demonstrate that they have created 10 permanent jobs in the UK or generated income over that period of at least £5m, they will be able to apply for indefinite leave to remain in the UK at that time, with no restriction on their right to work, rather than having to wait for the usual five years.

Successful applicants must start their business within six months of being granted the visa.


www.ft.com/intl/cms/s/0/553d1c5e-7d0a-11e2-8bd7-00144feabdc0.html
Riaz Haq said…
Here's an Aljazeera report titled "Pakistani economy grows in spite of state":

Lahore, Pakistan - Zia Hyder Naqi started his first business when he was eight years old, turning old newspapers into paper bags in the eastern Pakistani city of Lahore. He didn’t earn much, but the 1.5 Pakistani Rupees ($0.02) he made every day was enough to buy him his lunch, and a sense of satisfaction at having made something.

Today, 40 years later, Naqi is the managing director at a plastics manufacturing firm that employs 430 people, and earned $14.2m in revenue last year.

Synthetic Products and Enterprises Ltd (SPEL) is one of the largest firms of its kind in the country, and makes everything from plastic cups to the inner sides of car doors for firms such as Toyota, Honda and Suzuki, and everything in between.

Business has been good for SPEL, Naqi says, but that's not because the government is providing a conducive climate for economic growth.

"Let's start by saying that we work in spite of the government and not because of the government," Naqi told Al Jazeera. "It really means that we have to struggle. We compete against the best in the world."

Power cuts

Pakistan suffers from a raft of economic problems - spiraling inflation and unemployment, a chronic energy crisis, a lack of implementation of existing policies and an unstable investment environment, owing to the country’s tense security situation.

Primary among those difficulties, Naqi says, is the issue of power cuts - or load-shedding, as it is referred to in Pakistan.

"Our reliability is affected when we have load-shedding, because we don't know when power will arrive and go. So we have to create back-ups, which means that the cost of operations goes up. It affects morale, it affects our work, it affects our delivery, it affects our customers. [It affects] the cost at which we deliver, and how competitive or uncompetitive we become to the customer," he says, estimating that the cost of putting in those back-up system raises the overall cost of his products by as much as 10 percent.

Last year, Naqi’s firm spent an extra $1.2m on putting back-up generators into place, fuelling them and paying for their general upkeep, as opposed to taking electricity off the grid. Moreover, he says, that $1.2m is a sunk cost, as it is not being invested into productive processes. The result: it’s harder for Pakistan’s products to compete in the international market, as the cost of producing electricity pushes firms into a loop of spiraling costs and being unable to further invest in new technologies.

Pakistan’s electricity woes, analysts say, are a result of industrial growth outstripping the pace of growth in generation, and a woefully maintained distribution system that results in line losses of around 20 percent At its peak last summer, the country’s electricity shortfall was a staggering 8,500MW - about 40 percent of the country’s total generation capacity (not counting transmission losses)
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Meanwhile, far from the think tanks and policy committees, the entrepreneurial spirit of the eight-year-old Naqi is still alive and well. Over the last month, dozens of shops have sprung up all over Lahore, selling elections campaign-related merchandise - everything from pins and badges (for about $0.40 each) to gigantic flags ($2.44), from T-shirts ($3.05) to stuffed soft toys in the shape of party election symbols.

"With the amount of money that I’m making right now," says Muhammad Imran, 30, the owner of one such shop, "we could have built a whole bridge!"

....

http://www.aljazeera.com/indepth/features/2013/05/201358163114782192.html
Riaz Haq said…
Maha is the inventor of a ‘Piezoelectric Shoe’ (a customized engineered shoe that converts the daily mechanical energy of the walk into electrical energy) along with her team in NUST, Islamabad. The shoe charges low voltage mobile batteries up to 3-4 volts. http://lesjeunesentrepreneursduglobe.tumblr.com/post/65601505554/meet-maha-an-entrepreneur-from-pakistan
Riaz Haq said…
Without money or even a laptop to call her own, young Pakistani entrepreneur Sidra Qasim moved from her small hometown in 2011 to the big city of Lahore to start a business.

Her friend, Waqas Ali, asked her to join him as his business partner, and she moved into a hostel and took a job tutoring during the day. In the afternoon, she would walk 30 minutes to Ali's college campus where the two could use a free computer lab to work on their website. When the lab closed at 8, they went to the library and pored over copies of Harvard Business Review, reading case studies about start-ups.

Ali and Qasim are examples of a philosophy that some of the world's leading thinkers and philanthropists have been betting on: that the Internet and technology will help entrepreneurs in developing nations build wealth and pull themselves and their communities out of poverty.

In 2012, they had their first production run, and launched their business selling handcrafted shoes online. Within six months, their company, Markhor shoes, had sold 200 pairs of shoes in 17 countries.

"We were able to give jobs to 24 local craftsmen," says Qasim, who acknowledges that there is still work to be done, but it's a start. "In our next run we would like to increase their pay by two, and offer health benefits."

Technological advancements

Entrepreneurial advancements are especially impressive in the case of Pakistan, where power outages sometimes last 18 hours a day and foreign investment plummeted by almost a quarter in 2012 alone, according to the Central Bank. Facebook — the poster child of the new Internet age — was banned in Pakistan for a time in 2010, and YouTube, though easily reached through proxy servers, has been officially banned for four years.

And yet, information technology and communications is one of the fastest growing sectors in Pakistan's growing economy, which has seen its middle class double since 2002. In 2001, just 1 percent of the population was on the Internet; now Pakistan has 19 million Internet users, according to Census Bureau data.

"Even in small villages, people, especially young people, are using Twitter and Facebook," says Qasim. "People from my village order mangoes on their mobile."

Access to the Internet has made all the difference for young people like herself, says Qasim. Indeed, Ali, her hometown friend and business partner, got the idea for the online shoe business when he met local craftsmen in their village whose families have been making handmade shoes for generations, and saw their beautiful product. He thought they could find a wider audience by using Facebook and the Internet to market their goods.

Markhor's business links the old Pakistan with the new — in the glossy, hand-stitched shoes made in their local village, Ali and Qasim saw an opportunity that would exploit a hole in the market and employ local craftsmen who had been struggling to make ends meet.

Since 2000, Pakistani shoemakers had lost 90 percent of their business to China, leaving thousands without jobs. But the quality wasn't there with Chinese products. Ali and Qasim suspected that an international customer would appreciate a hand-crafted product that was hard to find, but available on the Internet.

http://www.deseretnews.com/article/865614783/Young-Pakistanis-use-Internet-to-embrace-start-up-culture-and-sell-handmade-leather-shoes.html

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