Microfinance Organizations Focus in Poverty Alleviation and Rural Development in Pakistan: A Survey of selected Organization in Islamabad & Rawalpindi

Abstract

Microfinance has emerged as one of the most effective strategies for combating poverty in the developing countries. Since its introduction in the Bangladesh in the form of Grameen Bank, it has been adopted in different developing countries for poverty alleviation and providing the poor with credit and finance in order to increase their earning capacity and improve their living standard. This study aimed at finding the role of three microfinance institutions including Kashf Foundation, Tameer Microfinance Bank and Khushhali Microfinance Bank, operating in Pakistan, in poverty alleviation as well as rural development. Positivist philosophy was selected to collect primary data through face to face interviews on the basis of a structured and close ended questionnaire. The sample of managerial staff of these organizations was taken by following purposive and convenience sampling. Primary data was subjected to univariate and bivariate statistical analysis through Statistical Package for Social Sciences. The results showed that microfinance organizations under study were playing positive role in alleviating poverty from Pakistan and enhancing development in the rural areas of the country. Different factors including the main objectives of the organizations, major focus areas, purpose of giving microfinance, different activities for reducing poverty like education facilities, technical training and health insurance and range of the loans provided to the poor people showed that these organizations aimed at poverty alleviation and did play effective role in enhancing per capita income in rural as well as urban areas. The results of the data analysis were presented graphically and interpreted in the light of the literature review. The results were substantiated and supported by literature review and showed that different activities of microfinance organizations helped in rural development and reduction in the poverty in rural and urban populace.