Impact of microfinance on the non-monetary aspects of poverty: evidence from Pakistan

Abstract

To examine the impact of microfinance (MF) on poverty alleviation this research utilized children’s education and housing conditions as the indicators of impact between the established and new clients of MF. Chi square test (χ 2) of significance is used to examine the difference between new and established clients followed by binary logistic regression. It is found that MF plays an important role in poverty reduction (non-financial aspects of poverty) by giving access to better education for their children and improved housing conditions. Established clients (membership with MF for more than 1 year) of MF have better housing conditions and enhanced children’s education than new clients. It contends that with little endeavors, these institutions can perform to eliminate poverty by giving access to various financial and social services. Based on the results, it is recommended, governments, multilateral development agencies should develop policies that perpetuate the MF.