Ayesha Saba

Experts highlight that structured seed funding can unlock entrepreneurship, generate jobs, and enhance economic resilience in Pakistan.

“Early-stage financing is a major hurdle for aspiring entrepreneurs in Pakistan. One of the biggest challenges startups face is the lack of initial capital. Many innovative ideas never materialize because entrepreneurs struggle to secure the necessary funding. A dedicated seed funding mechanism would provide a crucial boost to the startup ecosystem,” said Khan Muhammad Wazir, a former director to the minister of science and technology.

According to him, in countries with well-established seed funding programs like India, Singapore, and Malaysia, government-backed venture funds and startup incubators have played a vital role in fostering entrepreneurship. Wazir said that Pakistan can adopt similar models to ensure funding reaches promising businesses with scalable ideas. He emphasizes that these funding programs should be paired with mentorship and capacity-building initiatives to strengthen the managerial and operational skills of startup founders.

“If Pakistan takes a similar approach, we could see a surge in innovative businesses that not only create jobs but also contribute to long-term economic stability,” he added. He also highlights the role of public-private partnerships, stressing that incentivizing private sector participation through venture capital incentives, tax breaks, and co-investment schemes is essential.

Beyond financial support, he underscores the need for policy reforms to help startups and small and medium-sized enterprises thrive. “The taxation system needs restructuring to encourage small business growth,” he said, suggesting that the government introduce tax exemptions for startups in their early years and streamline compliance procedures. “This would create a supportive environment for new businesses, allowing them to reinvest profits into expansion and job creation.”

Meanwhile, speaking to WealthPK, an official in the youth affairs section of the planning ministry, who requested anonymity, noted that Pakistan’s startup ecosystem has shown promising growth in recent years, with fintech, e-commerce, and edtech (education technology) gaining traction. According to a report by Invest2Innovate (i2i), a leading entrepreneurship support organization, only 10% of Pakistani startups secure funding, with most relying on personal savings or informal loans to launch their ventures.

Pakistan has taken initial steps in this direction through initiatives like the Ignite National Technology Fund and the Pakistan Startup Fund. However, these efforts need to be scaled up and complemented by private sector involvement. “The government alone cannot drive this change. We need active participation from venture capitalists, angel investors, and corporate entities to build a sustainable funding ecosystem,” the planning ministry official emphasized.

Credit: INP-WealthPk