Non-Productivity of Microfinance Loans in Pakistan: Are Microfinance Loans Productive in Pakistan? (DBA Dissertation)

Microcredit, or micro-lending, involves extending small loans to usually to a less wealthy client originally intended to start or support a business. There are a number of challenges facing the microfinance industry in Pakistan, among which are issues of sustainability and the need to create a loyal and responsible client base. There are a number of different models of microlending, including associations, bank guarantees, community banking, cooperatives, credit unions, Grameen (the bank formed by Muhammad Yunus), small businesses, village banking, individuals, and groups. A few microfinance organizations that have been established in Pakistan include: Akhuwat, Naziran Yousaf Memorial Trust, and the Farz Foundation. Microfinance has not positively impacted the lives of many poor people in Pakistan because they are not using the loans for sustainable practices.