Abstract
Purpose: This study is designed to investigate the role of microfinance on the economic and social development of people in the rural areas of the Province of Sind Pakistan. This study considers and compares two situations of the respondents: economic and social conditions before and after taking micro loan. Methodology/Sampling: The target population for this study is those people who planned to take microcredit from the banks with the objective to change their lives by investing such funds in their existing business or opening new business. We conducted a survey about their economic well-being before taking microcredit (Feb-July 2013) and then revisited to them after a year and determined their status after taking microcredit. The study considers descriptive as well as statistical analysis such as Chi square, OLS estimation and one sample T test. Findings: The study concludes that there is no change in Economic Conditions of Borrowers after accusation of Micro finance. The microfinance could not improve their Business growth as well. However, in Social Development, there is significant improvement in the Lifestyle of borrowers, whereas, there is no significant improvement in Health and Education needs of Buyers before and after taking of microfinance. The study further concludes that borrowers believe that the Loan Amount provided is not sufficient for their needs and both the repayment schedule and interest rate are not reasonable to facilitate them. Practical Implications: this study provides bases for new dimensions especially for the policymakers and the regulatory bodies that the term structure of Micro credit should be revised as well as the amount of loan should also be sufficient for the borrowers’ need.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.