INVESTIGATING THE ROLE OF MICRO FINANCE ON ECONOMIC AND SOCIAL DEVELOPMENT OF PEOPLE: A CASE STUDY OF RURAL AREAS OF SIND, PAKISTAN

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Volume 11 Issue 2 2015

Author(s):

Muhammad Tariq
muhammadtariq1985@gmail.com

Abdur Rehman Aleemi
abdurrahmanjan@gmail.com

Dr. Athar Iqbal
Iqra University, Main Campus Karachi.
athar@iqra.edu.pk

Abstract 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 a microloan. The target population for this study is those people who planned to take microcredit from the banks to change their lives by investing such funds in their existing business or opening a new business. We surveyed their economic well-being before taking micro-credit (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. The study concludes that there is no change in the Economic Conditions of Borrowers after the accusation of Microfinance. Microfinance could not improve their business growth as well. However, in Social Development, there is a significant improvement in the LifeStyle of borrowers, whereas, there is no significant improvement in the Health and Education needs of Buyers before and after taking 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. this study provides bases for new dimensions especially for the policymakers and the regulatory bodies that the term structure of Microcredit should be revised as well as the amount of loan should also be sufficient enough for the borrowers’ need.
Keywords Financial Distress cost, Liquid assets, investment, employment and sale.
Year 2015
Volume 11
Issue 2
Type Full Length Paper
Recognized by Higher Education Commission of Pakistan, HEC
Category "Y"
Journal Name IBT Journal of Business Studies
Publisher Name ILMA University
Jel Classification -
DOI http://dx.doi.org/10.46745/ilma.jbs.2015.11.02.14
ISSN no (E, Electronic) 2409-6520
ISSN no (P, Print) 2416-8393
Country Pakistan
City Karachi
Institution Type University
Journal Type Open Access
Manuscript Processing Blind Peer Reviewed
Format PDF
Paper Link http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/11.2/14.%20Investigating%20the%20Role%20of%20Micro%20Finance%20on%20Economic%20&%20Social%20Development%20of%20People.pdf
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