TRIMMING DOWN POVERTY THROUGH MICROFINANCE IN PAKISTAN

Abstract

Microfinance refers to the provision of financial services, such as loans, savings, insurance, and other basic banking services, to individuals and small businesses in low-income or developing communities who have limited access to traditional banking services. Microfinance aims to alleviate poverty, empower marginalized communities, and promote economic development by providing financial resources to those who would otherwise be excluded from the formal financial sector. Credit does not play a direct role in poverty reduction; instead, it increases the borrowers' income so that they can be socially uplifted. This study was conducted to find out the role of microfinance in eradicating poverty in Pakistan. Punjab Rural Support Program (PRSP) provides small loans in the rural areas of Pakistan. In this study, three variables, credit, education, and family size, are taken as independent variables, while the borrowers' income is taken as the dependent variable. Data was collected from the rural areas of Tehsil Gujrat to project the impact of small credit. The study also presents some policy measures like expanding the outreach, increasing the amount of credit, etc, given, so that maximum benefits can be dropped to the last end.