MICRO-FINANCE AND SUSTAINABLE DEVELOPMENT: EVIDENCE FROM PAKISTAN

This paper attempts to look into the microfinance sector of Pakistan, its effectiveness and outreach and will further explore if microfinance has been effective enough to ensure sustainable development in the country. The purpose of the study is to examine the extent and efficiency of the microfinance sector, identify the lags in the system and propose feasible recommendations. The study examines microfinance at micro, meso and macro levels. The study highlights the performance of microfinance sector, outreach and efficiency of micro-savers, micro-insurance and assets and liabilities of the sector. Financial infrastructure and challenges to the sector are also indicated. The microfinance market lacks competition and only a few institutes can be tagged as operationally sustainable and have achieved the economies of scale. The study concluded that microfinance in Pakistan is perceived more like a social service rather a financial service. This calls for new techniques and more sustainable models to enable microfinance sector to prevail.