Challenges Faced by Islamic Microfinance Institutions in Pakistan

Abstract

The objective of this study refers to the prominence of the key prospects and challenges for the Islamic microfinance sector of Pakistan. This study has been carried out using the subsequent four steps: current situation of microfinance in Pakistan, identification of external and internal challenges, prospects in microfinance, and policy suggestions to improve the microfinance sector in Pakistan. In this research, the microfinance framework has been used to better recognize the procedure of building a sustainable microfinance institution. The findings have been attained through Primary data, which has been composed through questionnaires. The respondents are related to banks and other financial institutions. This research contributes in three different ways: First, microfinance establishments will be encouraged in featuring the difficulties and possibilities that are being disregarded during the time spent examining the issues and openings looked by this division. Second, other financial institutions and banks, understanding the centrality of this business, will get support to enter this division with progressively imaginative items and better standard practices. Thirdly, it will help the nation in thinking of new techniques for smaller-scale financing. Besides, the microfinance part may begin directing all the more instructional courses to upgrade the abilities of the customers, which will influence emphatically this segment.