Pakistan is currently confronted with the issue of stagflation where the economic growth has plummeted to the lowest level showing a decreasing trend and inflation is hovering in double digit. The low growth rate over the last 3-4 years doesn’t augur well for creating productive employment opportunities in the country which is bestowed with a bulging youth population. With the labour force increasing at the rate of more than 3%, Pakistan needs an average 7% sustainable economic growth rate to provide employment opportunities to the new entrants to the labour market.
In order to bring Pakistan on the path of sustained economic growth, the Government of Pakistan has adopted a New Economic Growth Framework which endeavors to spur economic growth in the country. The Growth Framework advocates reforms in the public sector to improve governance and to create enabling environment for businesses to flourish. It promotes the development of cities as engines of economic growth by amending zoning laws to discourage urban sprawls. The Framework also underlines the importance of vibrant markets driven by private sector and increased connectivity. Last, but not the least, the framework lays special emphasis on youth development through productive employment and entrepreneurships.
The Planning Commission of Pakistan, with UNDP support, is in the process of developing an institutional platform to help implement the New Economic Growth framework of Pakistan. In this regard, the Planning Commission is undertaking a number of studies which will inform the future analytical and policy advisory work of the Planning Commission.
Objective of the Study:
The study is part of a series of studies which will provide a starting point for further in-depth research and analytical work on different themes related to the four pillars of the Economic Growth Framework namely governance, cities as engines of growth, vibrant markets and entrepreneurship. The study will review and analyze the issues and constraints related to entrepreneurship and businesses development by focusing on financial sector. More specifically, the study will establish a baseline on the current issues and constraints hampering the outreach of financial services to businesses especially the medium and small enterprises.
Scope of Work:
- Analyze the current financial sector outreach to businesses especially small and medium enteprises. This will include an assessment of the credit share of the private sector especially small and medium enterprises in the total credit disbursement by banks and Micro Finance Institutes (MFIs) over the last four years. This will be followed by a brief tend analysis of the private sector credit share over the last ten years to assess if the credit flow to private sector is showing an increasing or decreasing trend.
- Identify and summarize factors that have significantly contributed to the trend in credit flow to the private sector. Assess the main issues and constraints that might have hampered the growth in the private sector credit share over the trend period mentioned above.
- Recommend how financial services outreach can be increased to private sector especially to promote entrepreneurship opportunities for youth. The recommendations may relate to institutional development support or incentives and regulations that will encourage the financial sector to increase its outreach of services to the private sector / small / medium entrepreneurship development.
The study will primarily be based on the secondary data available. However, where needed, the consultant will undertake interviews / focus group discussions with the relevant people / organizations. The study findings will be presented in the form of a short report as per a standard outline.
The study will be undertaken by a single consultant over a period of one month. However the level of effort / payment to the consultant will be based on 20 working days.
The consultant directly report to the Planning Commission/UNDP. Facilitation support will be extended by the Center for Poverty Reduction and Social Policy Development Project
“Equally Qualified women will be given preference”