Challenges and Opportunities for Venture Capital in Pakistan
In Pakistan, venture capital is in the condition of earliest stages and faces testing issues as business visionary dispositions, restricted help from the state, SMEs constrained controls and in addition family possessed organizations.
With the progression of time, if the government and the private segment assume their parts and endeavor coordinated endeavors, funding can develop. It can help in creating IT, abusing the administrations of innovative assembling part, advancing business and making openings for work for a noteworthy segment of the general public. With GPD growth of more than 6 percent in last five years, Pakistan has been able to attract domestic as well as foreign investment. The banking sector has grown more than 30-40 percent in last 5 years and this has also attracted foreign banks to acquire local banks or start their operations in Pakistan.
We have also seen around the U.S $ 12 billion foreign direct investment in Pakistan in last five years in oil and gas, banking and telecom sector. Entry of new players in mobile service provider companies has resulted in mobile connections with 55 million Pakistanis. The government of Pakistan has been successful in improving physical infrastructure, many projects are already completed and others projects are in final stage of completion. Mutual funds, asset management companies and private equity companies have also witnessed growth in last few years.
This is the ideal time for venture capital industry to grow when we have many positives like business-friendly government policies, government funding for sector development programs, high growth in the financial sector, the better standing of IT sector in the local market, a creation of business and technology incubators and overall economic development.
The key sectors that the venture capital firms are focusing and can focus more on attractive opportunities are telecom, IT, IT related products and services, pharmaceutical manufacturing and drug discovery/ research, biotechnology, textile, retailing, renewable energy (solar and wind), entertainment (water parks, theme parks, Cineplex, hotels, restaurants, resorts), LPG, real estate/construction, Business Process Outsourcing (BPO), transportation, auto and auto parts; and light engineering products.
