An Evaluation of Risks, Challenges and Prospects of Microfinance in Pakistan
Author(s)
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Abstract
This paper is to highlight the risks, challenges, and prospects of microfinance in Pakistan. Microfinance sector in Pakistan is expanding and growing with the passage of time; it is providing finance to the unemployed and needy people of the country. Microfinance is significantly used as a productive poverty mitigation tool; it is also believed that microfinance is the essential tool to entitling the power and raising their level of incomes. In Pakistan, more than 60% population is living in the rural area of the country, by the passage of time it is becoming a great challenge for the microfinance sector to target the rural area of the country, and it is required for the microfinance sector to obtain sustainable development and growth of the rural economy. According to the different researched held with different objectives, the profitability of the microfinance sector in Pakistan is increasing, but the different types of risks and challenges associated with microfinance sector are increasing too with the time which should be pondered. Simultaneously, there is pragmatic opportunity to take the limitless benefits for the economy. If risks and challenges are addressed appropriately, microfinance sector is readily available to be a panacea for the poor core class of the country.
Keywords
Microfinance, MFIs, MFBs, Poverty Alleviation, Risks, Challenges, Prospects.
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