Abstract
Purpose: The purpose of the study is to examine impact of micro-financing on poverty alleviation, access to finance and economic growth by comparing Bangladesh and Pakistan.Design/methodology/approach: Panel data of 56 microfinance institutions drawn by simple random sampling from 2002 to 2013 has been collected from financial statements of microfinance institutions and World Bank. Diagnostic tests, variance inflation factor (VIF) and breusch pagan have been applied to check muticollinearity and heteroscedasticity respectively. Data has been analyzed using fixed effect model as indicated by Hausman test.Findings: The analysis evidently authenticates that micro-financing has more significant impact on poverty alleviation and economic growth in Pakistan than Bangladesh. At the same time, access to finance in Bangladesh has more noteworthy impact than that of Pakistan.Originality/value: This study brings to light culmination since beginning of micro-financing on the basis of outcome, experience and comparative regional arrangements helpful for all stakeholders and regulatory authorities in both countries.
Highlights
Pakistan came into existence as independent Muslim state after division of British India in South Asia on 14 August 1947
This study focuses on background of micro-financing and its realistic approach with special reference to its existence and contribution in Pakistan and Bangladesh, in the field of poverty alleviation, access to financial services and economic growth in addition to achievements of microfinance institutions (MFIs) by comparing their financial performance and innovation
The comparative analysis of Pakistan and Bangladesh on the issue shows that noteworthy impact exists in Pakistan than Bangladesh
Summary
Pakistan came into existence as independent Muslim state after division of British India in South Asia on 14 August 1947. The demand for better sovereignty and hostility between the eastern and western sections of Pakistan flamed Bengali autonomy movement which resulted into forming East Pakistan as separate nation of Bangladesh on 16 December 1971 (separated from West Pakistan). Being Muslim majority area of sub-continent, history, traditions, civilization, populace, living pattern etc. As a whole, prevailed in this area of southern Asia because of higher birth rate resulting into outsized population, unequal division of wealth and rare usage of technology to explore resources. Population of Pakistan is 212 millions having density of 275 people per square km whereas population of Bangladesh is 161 millions as against density of 1240 people per square km
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