IMPACT OF MICRO-FINANCE ON GDP OF PAKISTAN

Abstract

Purpose- The main aim ot this study is to analyze whether there has been growth in important MFI variables (Income from loan portfolio, Income from investments, Income from other sources, Net financial margin. Average total assets, Average total equity. Total revenue, and Net income) over the period of 2008 to 2013. It is to gain as much knowledge about the \structure. clients and the important role MFIs play in developing economies like Pakistan. Methodology/sample- Data collection method for secondary data was from the publications of SBP. Annual data from 2008 to 2013 is the focus of current study for analysis of variables. The data for 8 variables is collected from “Annual Assessment of the Microfinance Industry 2014 of Pakistan.” For the purpose of qualitative data interview was conducted. They were carried out with co-founders of Microfinance in the UK, Grameen Bank’s founder Muhammad Yunus and his co-workers who are based in Glasgow Caledonian University. Findings- The result of the analysis reveal that all the selected variables has experienced tremendous growth over the period of 2008 to 2013. Among them, most growth was experienced in net income which increased steadily and is expected to increase further in the future. Interview reveals that microfinance plays an important role. It is the provision of a number of financial services, such as deposit instruments and credit, to those economic agents without access to traditional banks and that different MFIs follow different structure and face different environmental issues. Practical Implications- Provisions of the micro funds should improve the quality of life of the clients and should reduce the rate ot poverty from the country as well. The microfinance institutions should serve the people by proving them regular income resources, health insurance facilities, and children education facilities efficiently. The basic puipose of loan provision in to help die poor for living a stabilized life through small business schemes.