Impact of microfinance on quality of life, personal empowerment and familial harmony of female borrowers in Pakistan

Abstract

Microfinance institutions have made a significant progress in the last decade with elliptic growth in clients all over the world. As a financial inclusion initiative, microfinance institutions have performed well insofar as outreach to gender diverse groups is concerned. However, their role in poverty alleviation and social mobility is still not convincing albeit the incentives targeted on female borrowers. This paper aims to study the impact of microfinance initiative on enhancement of quality of life (QOL), personal empowerment and familial harmony of the female borrowers through logit probit regression model. Our results show a significant impact of microfinance on QOL enhancement of female borrowers, as well as their families, mediated by personal empowerment. This paper introduces the concept of familial harmony as an integral predictor of QOL of females in Pakistan. Our findings may be helpful in devising cointegrated policies directed upon community and gender‐based microfinance initiatives in public private partnerships.