Managing financial risks in Pakistan startups amid economic turbulence

Abstract

This study investigates the financial risk management practices of startups in Pakistan amidst economic turbulence. While the country’s startup ecosystem has witnessed remarkable growth in sectors like e-commerce and fintech, challenges such as economic instability, inflation, currency fluctuations, and regulatory barriers pose significant financial risks. Using a qualitative research approach, this study examines key financial risks—market, liquidity, operational, and credit—and evaluates the effectiveness of current risk mitigation strategies. The research focuses on Airlift Technologies as a case study to highlight the challenges of managing financial risks in a volatile environment. Findings suggest that startups face major hurdles, including inconsistent funding, rising operational costs, and policy unpredictability. The study underscores the need for improved access to funding, technological adoption for financial management, and government support to create a conducive environment for startups. Recommendations include enhanced financial planning, diversification of revenue streams, and better regulatory frameworks to ensure the survival and growth of startups in Pakistan’s challenging economic landscape.