Transforming Small Business Finance for Inclusive Growth

ISLAMABAD:In a major step toward strengthening small business finance in Pakistan; Karandaaz Pakistan, Accelerate Prosperity (AP)- an AKDN initiative, and Parwaaz Financial Services Limited (PFSL) have entered a strategic partnership, with a particular focus on women-led enterprises, climate-tech start-ups, and innovation-driven ventures.
This initiative aims to bridge a critical market gap by addressing the financial needs of businesses too large for microfinance yet perceived as risky by traditional commercial banks. Leveraging Karandaaz’s extensive expertise in small business finance, AP’s provision of capital to early stage companies, and PFSL’s innovative lending models, the partnership seeks to foster sustainable economic growth and financial inclusion across underserved sectors.
Setting the tone at the event, Mr Akhtar Iqbal, CEO Aga Khan Foundation Pakistan (AKF-P), spoke about the growing need for innovative partnerships to support Pakistan’s entrepreneurial ecosystem. Introducing the collaboration between AP, Karandaaz, and PFSL, he noted, “Having deployed over USD 15 million across 500+ businesses in Central and South Asia through various instruments, AP is now deepening its engagement with the ecosystem — cultivating strategic partnerships, advancing innovative financing mechanisms, and enabling co-investment opportunities to maximize support for these businesses.”
Highlighting the significance of the initiative, Mr Waqas ul Hasan, CEO Karandaaz, stated, “Small businesses form the backbone of our economy, driving job creation, economic stability, and innovation. As a pioneer and market leader in developing innovative financial solutions, Karandaaz consistently strives to set an example for the sector. It’s a momentous occasion that these institutions namely AP, Karandaaz and PFSL are coming together for delivering a market development access to finance solution for small businesses.”
The partnership is closely aligned with broader development priorities, including inclusive economic growth and climate resilience. Ms Henrietta Hamilton, Deputy Development Director at the UK’s Foreign, Commonwealth & Development Office (FCDO), reaffirmed the UK’s commitment to supporting such initiatives: “The UK government supports inclusive economic growth, gender equality, and climate resilience. This collaboration shows how development finance and private-sector expertise can work together to overcome market barriers and promote sustainable economic development.”
Mr. Sebastian Jacobi, Director at KfW, noted the broader impact this partnership will have on the startup ecosystem in Pakistan: “This collaboration between AP, Karandaaz and PFSL sets an important precedent for the startup ecosystem in Pakistan. The KfW financed startup project will surely benefit from this collaboration.”
Mr Javed Iqbal, CEO PFSL, added further context about the importance of tailored financial products: “Small enterprises, particularly those led by women or working in climate resilience, face specific challenges that traditional banking models don’t address. This collaboration enables us to offer inclusive, flexible financial solutions designed specifically for their unique needs, helping them scale and thrive sustainably.”
This landmark agreement underscores the collective commitment, of all implementing partners and their respective sponsors, to fostering a resilient, inclusive financial environment, driving sustainable business growth, and advancing economic opportunity across Pakistan.