THE DETERMINANTS OF CUSTOMER PREFERENCES TOWARDS MICROFINANCE SERVICES: A CONSUMER PERSPECTIVE FROM PAKISTAN

Abstract

Purpose-This study helps to understand the successful path of micro-financing, which can plays a vital role in poverty alleviation in Pakistan. Methodology/Sampling-To collect data authors of this paper visited different microfinance institutions (MFIs) like Tameer Micro Financing Bank and Khushali Bank Limited in Karachi. A structured questionnaire was designed for data collection of consumers of microfinance. Statistical data of 100 samples showed 46% of respondents acquired loan for agricultural purposes while 54% loans were business based. Findings-It is observed that male respondents are higher than female. Regression model showed 38% variation in consumer preference regarding the microfinance services. Statistic in the ANOVA shows the significance of model. The coefficient of MFI’s Approach with negative sign indicates an inverse relationship with that of consumer preferences. It means that MFI agents do not give proper value to the targeted consumers. Finally, the amount of loan and interest charged by the MFI’s is also having a negative impact on the consumers of micro- finance. Practical Implications-This study deliver statistical evidence of utilization of funds as well as the consistency of gathered data. Work showed that responded are need to be acquired more knowledge about the microfinance services in Pakistan.