Factors affecting microcredit recovery in Pakistan

Abstract

Purpose: The paper aims to examine the factors responsible for the poor credit recovery to microcredit institutions in Pakistan. Methodology/Design/approach: About 30 to 35 branches of microcredit institutions and NGOs working on microcredit sector were surveyed. Questionnaires of ten questions divided into three categories were used and questionnaire contains five point Likert scales by which we measure the factors which are responsible for poor credit recovery. For analysis descriptive statistics and frequency analysis is used and conclusion and finding are also discussed in the paper. Findings: From findings it is clear that various factors responsible for microcredit recovery to microcredit institutions in Pakistan. The factors are summarizes as staff weak skills and corrupt tendency to the credit payment & borrowers wrong attitude towards credit payment. There are many factors but these two mainly responsible for the poor credit recovery. These factors directly affect the poor credit recovery in Pakistan. The microfinance institutions should made changes in their strategies and adopt some practical steps to overcome the credit recovery problems in Pakistan. Research limitations and implications: The paper offer special information on microcredit system and informal sector of financial system Pakistan. Our microcredit systems always have less attention received.