THE IMPACT OF MICROFINANCE BANKS ON THE ECONOMY OF PAKISTAN

Abstract

In this paper I work on the impact of microfmance banks in Pakistan. This paper identifies the role of MFBs in alleviating poverty, their performances and challenges faced by them. Microfmance Banks in Pakistan has to make major steps to reach millions of poor people, who require variety of financial services. This can lead to the use of full potential of economy‘s resources, and lead to economic growth in the long run. Microfmance increase the income of the household, it also gives the way to borrower to start productive activities, which have low set up cost. The government and NGOs make real efforts to alleviate poverty, increase productivity and create employment opportunities for the poor people of Pakistan. Research is carried out by two ways. One is taking interviews from the officials of MFBs and the other approach is the collection of numerical data from microfmance Banks. Microfmance banks provides loans in two forms, firstly Individual based lending and secondly group based lending. Microfmance banks face a lot of challenges in Pakistan, which is the biggest hurdle in their growth. Microfmance Banks is not only the solution for bringing the poor segment of society into the mainstream of economic activity. It is not the solution of all society’s ills. Microfmance Banks still have opportunities to avail in the market for its tremendous growth. Microfmance products and policies are combined with awareness raising, training and community intervention programmes, so, it has a prolonged and wide reaching impact on communities.