Healthy Enterprise Ecosystem for Young Entrepreneurs Initiative

Why this is important

While youth unemployment has seen a decline globally to 13% in 2023, the post-COVID recovery has not been felt by all. In Pakistan, 4.5 million people are unemployed, of which young people aged 15-24 have the highest unemployment rate at 11% with the 25-34 age group following closely at 7% (Pakistan Labour Force Survey, 2020-21). The 18-35 demographic in Pakistan, the fifth largest in the world, holds great potential to support the country’s economic growth. However, intervention is required to address barriers to economic opportunities for young people, particularly women, to ensure they can realize this potential.

Entrepreneurship presents a viable solution to Pakistan’s youth unemployment challenges by supporting job creation, facilitating economic development, and fostering innovation. However, while one in four young people around the world are entrepreneurs or self-employed (Global Entrepreneurship Monitor, 2015), Pakistan ranks 120th out of 136 countries in the Global Entrepreneurship and Development Institute’s index for enterprise development. For young women, the challenge is even greater. In Pakistan, only 1% of entrepreneurs are women (World Bank, 2020) and the country was ranked 142nd out of 146 countries for economic participation in the World Economic Forum’s Gender Gap Index 2024.

Harnessing the promise of Pakistan’s youth population is a key priority for the Government. The National Youth Development Framework highlights entrepreneurship as a key area of focus through initiatives like Kamyab Jawan Program (providing financial assistance and capacity-building) and the Youth Business Loan Scheme (providing concessional loans). Despite efforts to improve the youth enterprise ecosystem in Pakistan over the past two decades, Pakistan’s youth still face numerous barriers preventing the growth and longevity of their businesses.

Donor: Citi Foundation

Project Partners: Seed (Pvt.) Limited and National Rural Support Programme

Duration: January 2026 – January 2028

Project goals 

This programme will improve the financial inclusion of youth entrepreneurs from disadvantaged backgrounds in Pakistan, promoting growth and job creation in low-income urban communities. By the end of the programme, 243 youth led microenterprises will show a revenue increase of 25% from baseline and create 486 new full time or part-time jobs, stimulating the local economy. We shall also explore the existing benefits and usefulness of the current financial system, identifying improvements and solutions through an instructive learning paper. We have identified two financial institutions to support this process, Sindh Enterprise Development Fund (SEDF) and State Bank of Pakistan (SBP), both specifically set up to make access to finance possible for young people.

We will provide intensive support to help each entrepreneur reach three crucial milestones: loan readiness, loan acceptance, and loan management. BAT will test and recommend appropriate support for success beyond loan acquisition, creating increased opportunities for businesses to scale and expand. We will also use project activities to understand whether current processes are fit for purpose and, where they are not, recommend improvements to key stakeholders to help facilitate better processes.

What we are doing

We support women entrepreneurs to achieve a sustained increase in revenue, with demonstrable improvements in financial literacy and business management. Alongside this, we help women scale their enterprises, building the resilience needed to remain in operation well beyond the programme's end.

To make this growth possible, we are building a network of key stakeholders, working to understand and address the gaps in the ecosystem that affect women's access to entrepreneurship resources and opportunities. We also draw on learnings from the success of microcredit in our previous projects to inform these discussions and shape our approach.

Ultimately, we are working towards systems change, advocating for the policies, practices, and innovations needed to make microcredit more accessible for women and youth led microenterprises in the long term.

Key results and activities

300 youth microentrepreneurs will become finance ready
In partnership with SEDF and local banks under SBP, we will deliver structured business support to 300 microentrepreneurs, equipping them with the documentation, skills, and business acumen needed to qualify for SEDF's and other appropriate banks' loan products. This will reduce rejection rates and improve loan utilisation success. Activities will be tailored to align with SEDF's and banks' eligibility criteria and will include support to develop a feasibility report and business plan, intensive one to one technical coaching to strengthen business structures and investment pitches, support to build financial models and understand cash flow management, and comprehensive market analysis and competitive strategy formulation based on Porter's Five Forces Model.
270 entrepreneurs (90%) will secure a loan of at least PKR 150,000.
Through structured training; participants will be supported through the loan application process to ensure they meet all requirements. This includes preparing project cost analyses, feasibility reports, and financial projections; ensuring tax compliance and gathering the necessary banking documentation; and developing income statements, balance sheets, and cash flow management practices to enhance financial transparency. We will also foster linkages with microfinance banks, venture capital funds, and impact investors, creating multiple financing pathways beyond the programme.
243 entrepreneurs (90% of output 2) will meet business growth milestones.
In year two, participants will receive support to accelerate their businesses and strengthen their position within their markets. This includes tailored coaching and mentorship on expansion strategies, customer acquisition, and digital marketing, as well as linkages with sector specific chambers of commerce, trade associations, and local procurement networks.

Lenders and key stakeholders will be convened to address financial inclusion for young entrepreneurs
Recognising the gaps in both understanding and intervention within the enterprise ecosystem, BAT will commission comprehensive research into the barriers to loan access, providing recommendations to policy makers, the private sector, and other key stakeholders within the microfinance and enterprise environment. Potential solutions could include adjustments to collateral requirements, interest rates, and documentation criteria.
The research will aim to understand the root causes preventing young people from accessing loans independently, as well as the barriers to growth support once access has been secured. It will include surveys and interviews with 300 participants to identify the obstacles they face in securing loans, an analysis of existing policies and regulations governing youth access to loans, an examination of the role banks, financial institutions, and microfinance providers play in shaping youth loan eligibility and lending approaches, and data collection on the economic impact of youth entrepreneurship in Pakistan and its potential to drive national economic growth. Findings will be shared with stakeholders through four roundtable sessions.

Key outcomes of the project include:

243 youth led microenterprises increasing revenue by 25% from baseline, creating 486 new full time or part-time jobs

300 youth microentrepreneurs becoming finance ready through structured business support

270 entrepreneurs (90%) securing a loan of at least PKR 150,000

243 entrepreneurs (90% of output 2) meeting business growth milestones in year two

Comprehensive research conducted into barriers to loan access, informing recommendations for policy makers, the private sector, and key stakeholders

Lenders and key stakeholders convened through four roundtable sessions to address financial inclusion for young entrepreneurs