THE IMPACT OF MICROFINANCE INSTITUTIONS IN ALLEVIA TING POVERTY IN KARACHI

Abstract

Purpose: The concept of microfinance sector has been progressing with foreign investment within the economy with the evidence that microcredits has been showing increasing trend in its utilization. The image of microfinance has been getting popularity in our society. The overall scenario has raised a question that is it really microfinance sector successful in controlling the poverty within the economy as per its objective or the case is reciprocal. This study is solely designed to capture poverty alleviation role of microfinance sector by focusing on the case of Karachi due to limitation of resources. Methodology/sample: Research methodology utilized during this study is descriptive in nature which has both qualitative and quantitative aspects of research. The sample size selected for this study is based on 100 respondents. The decided number of successful questionnaire filled on field from different areas in Karachi with the support of field staff of microfinance sector. The software used to analyze the data is SPSS. Findings: Cronbach alpha test is used to check the authenticity of the sample responses along with this graphical analysis is added in this study to visualize different aspects of the research study. Mainly Pearson correlation is used to test either microfinance sector has been playing its role in poverty alleviation or not by utilizing the responses collected through questionnaires. It is found through hypothesis testing that microfinance sector in Karachi has been showing its dominant role in poverty alleviation. Practical implications: The sole aim of this study not only to increase the size of literature but to provide practical implications. This study has been covered from the basics of microfinance sector to make it a useful tool not only to understand this sector, its history, its key principles but also current players, foreign investments in this sector and outcomes of this sector within this society. In addition, this study has been used to highlight barriers to the growth of this sector and policy measure to resolve them