Details

Case

Educator Copy

PANACHE: BUSINESS EXPANSION AND FUNDING OPPORTUNITIES

Misbah Tanveer Choudhary


INDUSTRY : Services, Business Sector, Financial Institutions, Beauty

AREA : Entrepreneurship, Gender

ORGANIZATION :

LENGTH : 9

LUMS No : 23-071-2017-1

PUBLICATION YEAR : 2017

DESCRIPTION

KEYWORDS:

Entrepreneurship, Gender, Women Entrepreneurship, SME, Loans.


DESCRIPTION:

Rukhsana Jamil is a small-scale entrepreneur who runs a beauty salon in a competitive neighbourhood. For the past few years, profits have been shrinking and the business is facing difficulty in retaining professional staff. Ms Jamil believes that expanding her salon to include a spa and fitness centre would considerably improve its financial sustainability. However, she requires external funding to undertake this expansion and diversification project. Although she has been introduced to various funding opportunities which range from commercial bank loans to internet investment campaign schemes, she faces uncertainty in reaching a suitable decision. Although bank loans offer more reliable and independent investment, their higher interest rates are discouraging. Government schemes such as “Prime Minister’s Youth Loan Scheme” have a lower rate of return; however, the requirement of collateral or guarantor poses a problem for Ms Jamil. Microfinance banks and NGOs, on the other hand, provide smaller loans at relatively higher interest rates. Newer sources of business investment such as venture capitalists and crowdfunding offer better investment plans but they are riskier and may entail a dilution of business control. In Pakistan, there are relatively fewer investment opportunities for women working with medium scale enterprises. They often have to utilise personal savings and assets to initiate and operate their businesses; however, soon the savings dry up and the lack of business skills and working capital investments limit business growth. Ms Jamil’s dilemma is reflective of debilitating circumstances faced by women entrepreneurs across Pakistan.


LEARNING OBJECTIVES:

This case aims to fulfil the following teaching objectives: • Underscore the importance of financial markets in bolstering business growth especially for small and medium enterprises, • Examine the financial hurdles faced by women entrepreneurs in expanding and sustaining business ventures in Pakistan, • Role of various sources of loan/investment in fulfilling financial needs of growing or nascent businesses particularly women-owned businesses in Pakistan, • Elucidate challenges and issues faced by Rukhsana Jamil in undertaking the expansion of a small business venture, • Draw attention to the institutional (financial) aspect of women entrepreneurship in most developing countries.


SUBJECTS COVERED:

Entrepreneurship, Gender