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University of Agriculture Faisalabad

Name: Faisal Imtiaz

AG #: 2019-AG-1119
Department: Rural Sociology
Subject: Demography
Role of Microfinance
Institution of Pakistan for
Poverty Alleviation
Personal Introduction
My name is Faisal Imtiaz and I am working in Microfinance industry since 2008 in
different organizations and different positions. During my professional career I get
opportunities to get deep look and analysis about poverty eradication through
micro finance institution. The below study and analysis is my personal observations
and views.

Topic Introduction
Many poverty alleviation program initiated by the government to alleviate poverty. The
result of these programs disappointed due to corruption cause discouragement and unfair
practiced. Micro credit seems to provide a permanent source of income. Its primary
objective is to enable the poor to change their life style positively and make better than
Microfinance Institutions in Pakistan
 Damen Support Program
 Prime Minister interest free loan
 National Rural Support Program
 Apna Microfinance Bank Ltd. (formerly NMFB)
 FINCA Microfinance Bank
 Khushali Bank Limited,
 National Rural Support Programme Bank Ltd. (NRSP Bank),
 Pak-Oman Microfinance Bank Ltd. (POMFB),
 Tameer Microfinance Bank Ltd. (TMFB),
 The First Microfinance Bank Ltd. (FMFB),
 The Punjab Provincial Cooperative Bank Ltd ,
 U Microfinance Bank Limited,
Significance of the Study
The study will be helpful to see the improvement in economic status
of the people after utilizing micro credit facility. Micro finance has
recently emerged as an integral tool for poverty alleviation. Keeping
in view the significance of the Micro Finance Training, IRM Institute
of Rural Management has designed comprehensive training modules
to meet the demands of the poor communities.
The programme is continuously developing and is providing support
to the micro finance institutes at national and international level
through training and experiential learning.
Objectives of study
• To study the micro credit as a positive change in the society .
• To highlight the ways to help reducing poverty, improve the living
standard of the poor people on suitable condition and increase the
• To analyse the role of microfinance institutions in making people
self-sufficient and self-employed.
Major roles played by Damen Support Program includes
• Making sure the self-sustenance and helping poor fight against poverty.
• Helping women to participate in economic development, Micro Credit also fosters
gender equality and economic wellbeing.
• Credit availability to people to start small businesses, ensuring access to education
health facilities and employment generation.
• Ensuring the availability of funds to poor who do not have access to formal credit institutions
Research Methodology
• Survey Approach
An analysis of the social research methodologies suggests that survey is the
handy tool for managers to collect secondary and primary data using
questionnaire, research estimated data and existing literature about the topic
under consideration. It is noted somewhere that in secondary research, the
secondary approach is the most frequently used mode of reflection because the
literature surveys are reportedly.
• Population and Sample
A population is a collection of all the elements we are studying and about which
we are trying to draw conclusions or the population is the total collection of
elements (students, citizens, players, accountants, universities) about which we
wish to make inference based on sample information The population of the study
consists of all the Damen Support program branches. In our sample we included
Two branches of DSP situated in Faisalabad city.
Demographic Data of Daman Support Program
Table 1 shows that as the female very important segment of the society, they had
got benefits from Micro finance. Damen Support program prefers the women to
provide funds through micro finance as they are more trust worthy and utilize the
loans more properly and in a goodway.

Gender Frequency %
Male 09 %
Female 91 %
Total 100 %
Data Collected from Active Clients of Damen Support Program Faisalabad
Table 01: Table 02:
Age wise distribution of sample respondents Age wise distribution of sample respondents

Age group (years) Frequency % Marital status Frequency %

Un married 20%
18-25 20%
Married 55%
26-35 60%
Widower 15%

36 and above 20%

Divorced 10%

Total 100 Total 100

Data Collected from Active Clients of Damen Support Program Faisalabad
Table 4: Table 5:
Education level of sample respondents Occupation of sample respondents

Education Frequency % Occupation Frequency %

Farmer 15%
Illiterate 90%
Retailers 20%
Up primary 6%
Home enterprises 32%

Primary pass 4% Sewing and


Total 100 Total 100

Data Collected from Active Clients of Damen Support Program Faisalabad
Table 6:
Table 7:
Family size of sample respondents Micro credit

Amount (Rs) Frequency %

Family size Frequency %

10,000 15%

Large 45%
20,000 53%

30,000 25%
Medium 55%

40,000 13%

Total 100
Total 100
Data Collected from Active Clients of Damen Support Program Faisalabad
Table 8: Table 9:
Interest charged Time to return loan

Interest charged Frequency % Time to return loan Frequency %

Fate Rate 20% 22% 6 months 0%

Declining Rate 78% 12 months 100%

0.91% per day

Total 100 Total 100

Table 10: Table 11:
Processing of loan Security

Loan processing (days) Frequency % Bank Security for

repayment of credit Frequency %

8 25%

Yes 0%
20 69%

30 6%
No 100%

90 0%

Total 100
Total 100
Table 12: Table 13:
Fulfil the basis needs Quality of children education

Fulfilling the basic Quality of children

needs Frequency % education Frequency %

Yes 90% Yes 81%

No 10% No 19%

Total 100 Total 100

Table 14: Table 15:
Quality of living standard Improvement in income and saving

Quality of living Improvement in

standard Frequency % income and saving Frequency %

Yes 79% Yes 84%

No 21% No 16%

Total 100 Total 100

Table 16: Table 17:
Debt burden Other household items

Debt burden Frequency % Other household items Frequency %

Yes 31% Yes 77%

No 69% No 23%

Total 100 Total 100

The People mostly come to know about the loan facility through personal sources so it
shows the popularity, effective working and customer satisfaction in regard to micro
credit scheme. As other commercial banks do not offer such a small range of credit
general people are highly attracted towards the micro credit bank. Most of the
customers have taken the loan of Rs. 20,000 which is easily repayable and this shows
that many people belong to low income group. Some Compensation In interest should
be given to those who are old customer of the bank. Almost all the customers are
satisfied with the dealing and operation of the micro credit bank.
The Time period of the loan to return is one year. It is a very moderate and manageable
time period. The bank does not insist upon any special requirements or conditions for
extending credit. It just tries to focus on the nature of the business. It means that the
loan is granted for the business which is considered helpful to generate profit. Normally
15 days to 20 days are taken to process the loan application which is a proof of
efficiency, coordination and hard work of management.
Total policy holder strength according to data review on 23 DEC 2019 was
. The active borrowers of Damen Support program is 12,00,000 with OLP
of 1807 M in microfinance program. Women Percentage of poorest clients
is 100% in this microfinance play an important role to achieve their goal,
and improve the living standard of the family members or a single person.
In total review of Loan by the DSP is given to the deserving customers (in
groups) without asking them to pledge any tangible guarantees. All the
members of group give guarantee for one another, which is convenient
for all of them. Thus a lot of time for giving a tangible guarantee is saved.
Independent investment rate is high which shows the efficiency of micro
Although Micro-credit scheme has brought positive changes in reducing the poverty,
yet this scheme has certain flaws and deficiencies in operation which might be
streamlined so as to improve the living standard of the poor people.
Youth Career Counselling Program, Micro credit must be given to the
Young, Energetic and the people in the age group of 20-30 because they can utilize
it more productively.
Educational Program, Free health program, in cooperation with other
organizations supporting traditional education in art and craft, micro credit
programs, which provide the financial support families need to meet educational,
health and livelihood requirements.
Advocacy & Campaign Program, The bank should start the programs
or to arrange seminars to update the borrowers about the productive utilization of
Business development Program, the bank should try to reduce the
interest rate up to 6 to 7 percent instead of 20% just like Prime Minister Youth
business loan scheme.
 Let’s Plant & make green Pakistan Program.
Humanitarian & Development Efforts, Improvement of Capacity &
Infrastructure of Education Services.
Research Programs, include students, build relationships with people on
the ground, and create hubs in various locations to facilitate research and