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Published Date: Oct 6, 2016

Lack of legal definition preventing social enterprises from getting funds

The lack of legal definition for social enterprises is preventing them from approaching financial institutions for funds and in the service sector, they face the challenge of double taxation, said Dr Viqar Ahmed, the deputy executive director of the Sustainable Development Policy Institute (SDPI).
He was speaking at the launch of a study on the ‘Social Enterprise Landscape in Pakistan’, which was hosted by the SDPI and the British Council on Wednesday.
He added that the current taxation system leads to a higher cost of doing business and that there is a need to help social enterprises overcome the challenges they face.
“The planning commission needs to make the centre for social entrepreneurship operational as soon as possible,” he said, adding that Pakistani universities should offer courses in social entrepreneurship.
Social entrepreneurship is to start up companies and other establishments in order to develop, fund and implement solutions to social, cultural and environmental issues.
Dr Viqar said that of social enterprises were not encouraged, several Sustainable Development Goals will not be achieved.
Also speaking on the occasion was Benazir Income Support Programme (BISP) Chairperson Marvi Memon, who advocated enhanced cooperation between BISP and young entrepreneurs in order to reduce poverty. She said BISP wanted to be a major partner of social enterprises across the country.
“[BISP] has the best data, as a social safety net, which should be utilised through partnerships,” she said, adding that BISP had recently introduced a biometric payment mechanism for all payments and processes in order to ensure transparency. “We need to make more efforts to help women entrepreneurs succeed,” she said.
Secretary Ministry of Finance Rana Mohammad Afzal Khan said the government was working on introducing regulations and policy frameworks for social enterprises. He said there were thousands of charity institutions and foundations which can be defined as social enterprises and which work without a regulatory framework.
SDPI Executive Director Dr Abid Suleri said there are social enterprises can help fill the gap where the government cannot reach.
“There is no agreed upon definition for a social enterprise, but social entrepreneurship is about the welfare of the people and since the social sector is ignored in Pakistan, there is room for these enterprises to grow,” he said, adding that the government should recognise the potential of social enterprises for service delivery and as contributors to economic growth.
British Council Director Programmes Jim Booth said there is a need to help social entrepreneurship achieve its potential in Pakistan.