role of microfinance practices in poverty ALLEVIATION: CASE STUDY OF THARPARKAR DISTRICT, SINDH, PAKISTAN

Abstract

Microfinance sector in Pakistan is increasing rapidly as evident with 29.5% growth observed in fiscal year 2014/15 compared to last year. Microfinance is an alternative to those who fail to approach commercial banks due to lack of bank guarantee against loan poor people of rural areas, especially women. Accordingly, in fact . The main beneficiaries of microfinance programs are literature advocates that poverty is generally reduced through microfinance activities, but multidimensional poverty in 2014/15 is 41.5% in rural areas of Sindh which is almost same in reported by United Nations in 2015 in a report “Multidimensional Poverty in2012/13, as Pakistan”. This thesis therefore, aims to investigate the contradiction and evaluate the role of microfinance practices in poverty alleviation considering the six independent variables i microfinance loan (AMFL), efficient usage of microfinance loan (EUMFL), establishment and development of new businesses (EDNB), employment opportunities (EO), lifestyle of accessibility ofi.e. microfinance borrowers (LMFB) and asset accumulation (AA).Our research is explanatory in nature, therefore, we develop research hypothesis against each independent variable before data randomly selected from the Tharparkarcollection. A sample of 380 micro finance borrowers district of Sindh to fill out the five (5) point likert scale questionnaire. Primary data gathered from questionnaire was assessing through a variety of statistical tools like frequencies, descriptive statistics, correlation and multiple regression analysis. After overall analysis, we concluded that microfinance activities have a positive and significant role in poverty alleviation of Tharparkar district but still microfinance activities not alone in a position to eradicate poverty altogether. To control the multidimensional poverty in rural areas of Sindh, the government should play its role to provide basic facilities to poor people including free basic health access to water, electricity and sanitation.