Miscellaneous

Empowering Economy through Women — Cottage Industry

In a country with a social setup where societal norms are influenced by multiple cultural backgrounds, women are encouraged to work largely from their homes. Cottage industry plays a significant role in economic growth of women providing them with opportunities to work from home. Approximately 65% of Pakistani women earn their livelihood from cottage industry, being experts in manufacturing hand-made carpets, crockery, shawls, candles, Ajrak, rugs, caps, bangles, crochet work, musical instruments, straw products, wood carvings, etc., and thus contribute to the financial status of their households.
Considering the developing status of Pakistan, where technical as well as skilled human resources are scarce, our focus remains on an industry though small, but one that creates a huge positive impact and enables women to work as a catalyst for the economic development of our nation. Cottage industry of Pakistan covers a large number of people, which impacts the social structure by employing rural laborers who would otherwise be unemployed during some parts of the year. An active cottage industry also strengthens women’s position in the society as their participation stimulates active labor force and also allows established organizations to contact them and spread their work worldwide.
The dilemma, however, is that in this era of global transformation, we, without realizing the need of growing both technologically and economically, are still somehow sticking to status quo. The need of the hour is to understand that an economy cannot grow without the support of over 48% of its population, which in Pakistan’s case, are women. We need to think what our economy needs women to play their role. This is not possible until they are allowed to represent and take part in business decisions and occupy leadership position at a mass level. Handicraft sector is one of the few sectors, which is directly linked with the skills of women so this segment direly needs to be tapped into.  
We need to focus on enhancement of women’s role in decision-making and power sharing in all activities. Gender inequality, opportunities to present their work in the right markets, lack of education and absence of access to credit facilities are the main barriers in making women financially independent. We need to spread awareness about women’s contribution as well. Steps should be taken to lower the barriers faced by women who have the expertise on handicrafts to be international entrepreneurs of future, by helping them connect to international value chains. Lowering the barriers faced by female entrepreneurs at home and internationally, and helping more businesswomen to connect to international value chains, would bolster growth and inclusion. 
The major issue, which women face in establishing and growing their production capacity is shortage of capital, as females have a natural tendency to spend money on the household instead of reinvesting. Ultimately, they cannot access the markets, and have to rely on agents and organizations, which exploit the poor women settling them on low wages, keeping a high margin of profit with themselves. 
Pakistan used to be 4th major exporter of carpets in the world for past many decades. Till 2014, it was commonly said that, “every third house in the world has a hand knitted carpet from Pakistan.” However, the demand for Pakistani carpets declined drastically in past few years, so much so that now Pakistan only shares 7% of total handicrafts sold globally. Among many reasons of this fallen demand, is lack of education, which keeps these small-scale industry investors unaware of innovations, therefore they stick to old methods. These women and artisans mostly inherit the skills and method of production from their elders; there is no provision of training and learning, which grows the industry. Producers are not aware of the changing needs and market demands of international markets, thus nowadays, most of the goods produced in Pakistan are generally sold in local markets only. 
The government of Pakistan has developed an organization named Small and Medium Enterprises Development Authority (SMEDA), as a premier institute to take care of the issues faced by these Small and Medium Enterprises (SMEs). State Bank of Pakistan has initiated many loan schemes through commercial and microfinance banks to ensure timely and easy access to capital for these small and home based businesses, but unfortunately, limited resources of microfinance banks and only-for-profit approach of commercial banks, have been a barrier between small scale investors and growth of cottage industry in Pakistan. The newly launched scheme of Kamyab Jawan, whereby a clean loan facility up to PKR 500,000 can be availed by the public with entrepreneurship vision with a 25% quota fixed for women, can help the women working in cottage industry to develop their skills into business by making use of the loan and other aspects of commercial assistance that will be attached with these loans. 
Way Forward
•    SMEDA should spread awareness among female entrepreneurs about the loan facilities introduced by the government to support SMEs. There should be special funds to explore international market by giving them platforms of overseas exhibitions, participation in business management system trainings, international market promotions, E-commerce opportunities and trademark registration and availability of technology. 
•    Electricity rates and taxes should be reduced for production units, in order to encourage them to get registered so that their contribution in overall economy can be calculated. As most of these units are run by women of lower middle class families, facilitating them will play a positive role in increasing their contribution in GDP and their per capita income. 
•    Newer techniques and technologies should be introduced to encourage efficient utilization of resources to produce the best quality product in minimum rate. Standard packaging techniques to match international standards, marketing and selling can help promote our local products in international markets. 
•    Lastly, but most importantly there is a dire need to educate men about the importance of contribution of women. That they can bring positive change to the income of their household as well as the economy of Pakistan as a whole. 
If women have access to the markets both local and international, only then will they be empowered to produce the most in-demand product and will be able to sell them at competitive rates, so much so that the middle man’s role can be removed from this supply chain. This will also serve as a step forward to raise the standard of living for these local producers of cottage industry and ultimately improve the poverty level of Pakistan in the world poverty Index. HH


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