Does microcredit help the poor and financially marginalized communities? Experience of Pakistan

Abstract

The study aims to evaluate the microcredit programs operating across the Pakistan. Microsurvey data collected by Gallup Pakistan at the national level have been used. The sample size of the study consists of 2,070 respondents. The impact of the microcredit program on their clients has been evaluated by using descriptive statistics, multiple regression, the mean difference model (MDM), and quartiles. The study reveals that microcredit program in Pakistan may not be helpful for extreme poor in its operational areas across the country because disbursement of credit to the lower quartile income poor does not yield fruitful income change. Despite an overall positive change (7.76%) in income, these programs show weak evidences of benefiting the lower quartile community members during the study period. The study suggests that microcredit is not equally beneficial to all segments of the poor.