Pakistan’s government has launched a $10 million fund aimed at strengthening the country’s startup ecosystem, with Federal IT Minister Shaza Fatima Khawaja announcing plans to scale the initiative to $25 to $50 million with international partners in the coming years.
Second Phase of a Broader Push
The $10 million commitment represents the second phase of the government’s startup funding effort, following an initial phase that is already being deployed. The announcement was made at the Fintech Roundtable 2026 in Karachi, where officials outlined plans to work with global institutions including the World Bank, the International Finance Corporation and the Asian Development Bank to expand the fund further.
Formalizing the Informal Economy
Khawaja framed the initiative as part of a wider effort to formalize Pakistan’s large informal economy through digitalization. “If we formalise 25% of the informal economy, that’s about $100 billion added to Pakistan’s national GDP, which is a huge number,” she said, underscoring the scale of opportunity officials believe is at stake.
Digital Payments Milestones
The State Bank of Pakistan, the Sindh government and the federal IT Ministry are all involved in the effort. Officials pointed to recent progress, including full digitalization of government-to-government payments and the distribution of 10 million free SIM cards through the Benazir Income Support Programme, which has helped generate trillions of rupees in digital transactions.
What Comes Next for Founders
Conversations with international financial institutions on scaling the fund further are described as being in advanced stages. For Pakistan’s startup founders, the expanded funding pool could offer a much-needed lifeline at a time when early-stage capital has been harder to secure both locally and from international venture investors.