THE ROLE OF MICROCREDIT IN POVERTY REDUCTION: EVIDENCE FROM PAKISTAN

Abstract

The deprived in Pakistan typically obtain loans from unofficial sources. Due to a lack of resources and income, they are forced to take out loans in order to pay for basic necessities, and the collateral requirement leaves them vulnerable to unofficial channels. Pakistan has a distinct position as an impoverished nation with few outward manifestations of poverty. "The Role of Microcredit Programme in Poverty Reduction: A Case of Pakistan" is the topic of this research project. This study looked at how borrowers assessed microcredit's impact on home welfare and economic development. The findings indicate that the Microcredit Programme has a significant role in reducing poverty by improving the social and financial circumstances of the impoverished. Additionally, it has the potential to boost independent work in the studied field. It is obvious that these loans encourage the growth of small businesses. Ultimately, the researcher came to the conclusion that microcredit was more effective at reducing poverty in the chosen Pakistani regions due to the various measures that were implemented. Moreover, as per the results, the researcher must suggest that the media role should be improved in rural areas of Pakistan so many people could get benefits from the microcredit scheme, and with this, there should be a proper check and balance to determine whether the loan provided to the person has used that amount in said business or not.

Keywords: Poverty, Microcredit, Loan, Welfare, Pakistan