Economic Impact of Micro Finance on Borrowers: Evidence from Punjab, Pakistan

21 Pages Posted: 29 Jul 2011

See all articles by Rizwan Mushtaq

Rizwan Mushtaq

Université Paris I Panthéon-Sorbonne

Shahnaz A. Rauf

Air University Islamabad, Pakistan

Date Written: July 28, 2011

Abstract

The purpose of this study is to investigate the economic impact of microfinance institutions on borrower households in particular the impacts of small amount of loans in a high inflationary economy like Pakistan. The study is based on primary data and comprises of a sample of two hundred households including borrowers of microfinance institutions and non-borrowers who are eligible to be a client of MFIs. Binary logistic and least square regression is used to find the impact of microfinance on different economic indicators of the borrowers. Logistic regression results indicate positive and significant impact of microfinance on income of the borrower, while the least square regression presents somewhat different results about the impact of microfinance on assets of the borrower households. Independent sample T-test was used to measure the significant difference between clients and non-clients. We found that the economic position of the borrower households of microfinance institutions is better than the non-borrowers.

Keywords: economic impact of microfinance, Pakistan, poverty, microcredit

JEL Classification: I30, I38, I39

Suggested Citation

Mushtaq, Rizwan and A. Rauf, Shahnaz, Economic Impact of Micro Finance on Borrowers: Evidence from Punjab, Pakistan (July 28, 2011). Available at SSRN: https://ssrn.com/abstract=1898376 or http://dx.doi.org/10.2139/ssrn.1898376

Rizwan Mushtaq (Contact Author)

Université Paris I Panthéon-Sorbonne ( email )

12 place du Panthéon
Paris, 75005
France

Shahnaz A. Rauf

Air University Islamabad, Pakistan ( email )

Sector E-9 Islamabad Pakistan
ISLAMABAD, 44000
Pakistan

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