The Role of Micro Financing in the Uplift of Pakistan's Economy

Abstract

Abstract Poverty has always remained a major development problem of Pakistan. Many methods have been used in the past to alleviate poverty including direct credit approach, focus on job creation, heightened economic activity, islamic modes of financing including zakat, fitrana and sadqat. The main focus in either of the approaches was on income redistribution. However, there is immense evidence suggesting that a successful anti-poverty strategy should include a policy regime that promotes inclusive economic growth; investments in human capital, infrastructure, and micro-credit. In Pakistan there are many formal, semi-formal and informal channels working for the provision of the micro-credit. This thesis studies the efforts of Pakistan Microfinance Network (PMN) and Aga Khan Rural Support Program (AKRSP). PMN consist of 12 members falling in different categories of formal and informal credit providers. This work discusses a few of them with the maximum outreach including, the First Microfinance Bank, Kashf Foundation, Orangi Pilot Project, Punjab Rural Support Program and Bank of Khyber. Later the impact assessment of AKRSP and Kashf Foundation has been discussed in detail. This study is expected to be helpful for the readers to have information about how to change with the dynamic and competitive socio-economic environment and how to create better opportunities for the less-privileged.