| This thesis examines and explores the notion that microfinance organizations help to reduce incidence of poverty for both men and women borrowers and ultimately leads to better socio-economic status of male borrowers and women’s empowerment in case of female borrowers.The review of literature provides an extensive and in-depth review of the microfinance role in different countries and jurisdictions.Recent discourses regarding microfinance evolution from the view of clients’ perspective is also discussed in detail.The work is mainly focused on microfinance delivery and its impact on user’s skill enhancement that ultimately leads to poverty reduction.Poverty reduction is captured through 10 dependent variables in first part of the study and in the second part regarding its impact on women’s empowerment,its measured through increased annual income and consumption.Here income and consumption act as dependent variable and loan amounts as primary independent variable.In first part FMFB microfinance bank limited intervention in Pakistan’s Punjab province in districts of(Lahore,Gujranwala,Sialkot and Faisalabad)is studied.300 respondents were selected for the study and another 50 users were selected for group discussion for qualitative purposes.30 branches were randomly selected without any bank staff influence.Groups and individuals were also selected independently without any interference from bank staff.Poverty in our study is defined as lack or deficiency of capability and henceforth poverty reduction is made possible through enhancement of better-quality skills for the low-income deprived individuals.SME sector is one of the most important sectors for generating employment opportunities for masses of any country,Pakistan is no exception.Finance is life blood of any organization and without it no business entity can survive and thrive.Therefore,making its availability at ease and on favorable terms for small and microenterprises is key to success of these organizations.Unfortunately,due to lack of knowledge and technical know-how a lot of micro-entrepreneurs in Pakistan do not take full advantage of the benefits microfinance organizations can offer for sustainability and growth of these entities.There’s’ also some anecdotal biased about these organizations the way they operate and take advantage of poor clients.While there’s truth in this narrative of harm caused by microfinance organizations,regarding high interest rate and their delivery method,there’s not much recent empirical evidence as to what extent and whom these organizations help or harm and how much? Furthermore,do they deliver same results for both male and female borrowers and does it facilitate women entrepreneurship and women’s empowerment.Later in chapter six effect of microfinance on ‘women only’entrepreneurs to find out its effect on women’s empowerment is studied in detail through the use of difference in difference method.Amartya Sen capability poverty reducing approach has been applied study(FMFB evaluation).First in the microfinance section of the study,factors that lead to better utilization of microfinance services and products is evaluated and,the ones that produces better results are identified.Keeping in view research objective,methodology,collection of data and analysis were steered through capability,interpretive and participatory assessment methods.Primary data was composed from interviews and questionnaire from respondents.Secondary data was obtained through verified sites.Data analysis is completed through use of frequency distribution,cross tabulation,OLS and logistics regression techniques.Poverty reduction is measured through increased capabilities at household levels and business levels for recipients of microfinance programs.Preceding that in the subsequent section microfinance effect and impact on poverty reduction is studied.Furthermore,composite business outcome indicator and expansion at household level indicator is determined by combining the individual units.The results shows that use of microfinance products and services enhanced capability expansion at both business and household level to different degrees.With most clients reporting their capability increased to somewhat and very much at both business and household levels and this trend is consistent with both male and female borrowers,however women seem to be somewhat ahead to reap more benefits as compared to men borrowers.Following that microfinance impact on women entrepreneurs alone is studied to find out its role in women’s empowerment.For this study two groups of households are used in our study one borrowers and other non-borrowers,and a household sample was obtained through use of stratified multistage random sampling technique.In the first stage,townships were selected that the program has access to and a total of 13 such municipalities were selected.The microfinance program has been functioning since 2011 in 4 out of 13 towns.Subsequently,sample villages were chosen from sample townships.A total of 4 communities were taken from each district,and altogether 50 villages were selected.Based on the borrowers lists available,from each regional branch office in the selected districts a total of 350 microfinance female clients were randomly selected to be interviewed by female staff.Another 130 households were selected from village committee head(locally called namberdar),who did not take out any loan.Due to various reasons;refusal to participate in survey,non-availability,and incomplete survey responses,50 clients were dropped from borrowing group and 30 were dropped from nonborrowing group,henceforth bringing the final sample to 300 borrowers and 100 non borrowers.Borrowers,female were defined as those who took micro loans from the above stated microfinance institutions in above said districts in years(2009/2016)and nonborrowing households were defined as the ones who never took loan but belonged to same district.Women’s empowerment is gauged using income and consumption as welfare indicators.The difference in difference method is applied to investigate the effects of microfinance on its recipients,which is considered a useful tool to tackle the selection bias problem.Our study result shows that microfinance programs that target women not just only increase income and consumption of female borrowers,making them financially stable,but in fact,many local stakeholders also get benefited from it,and in turn,it creates opportunities for the whole local community.This study shows microfinance helps greatly women in bettering their socioeconomic status,that ultimately leads to women’s empowerment however,the study finds that it does not reach to the poorest of poor women and as such they should be helped through other means of support like government grants and training program to equip utilizers with adequate knowledge and resources before they could apply for microfinance and reap full benefits of the service.The association among microfinance and menace of poverty is dynamic and complex and henceforth,needs constant evaluation,according to ever changing microfinance users’ “needs and wants”. |
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