Women borrowers of microfinance: an urban Lahore study.
Jafree, Sara Riza ; Ahmad, Khalil
INTRODUCTION
Microfinance was initiated in the 1970's by Dr Muhammad Yunus,
through provision of small business loans to impoverished rural
villagers in Banglade. (1) The objective of microfinance over the last
three decades remains to target 'the poorest of the poor',
enable them to mobilize small business ideas and to invest in
non-financial social development of the borrower. (2) The achievement of
the millennium development goals has been recognized to have links with
microfinance expansion, as a tool for social development and elimination
of poverty. (3)
In 2005, 1.4 billion people in the developing world (25% of total
population), lived below poverty lines of USD 1.25 per day. (4) it is
estimated that 70% of people living below poverty lines are women (5)
and fears concerning the ' feminization of poverty' have
encouraged policy research toward possible solutions through
microfinance services. It has been discussed that women have
characteristics which trap them in poverty including lack of education,
limited employment opportunities, low income, lack of labor laws and
unpredictable labor supply due to domestic responsibilities and
child-care. (6) Additionally, microfinance and women have become viable
partners because women are known to be more credit-worthy in terms of
loan repayment and to use their enhanced income for household welfare.
(7)
PAKISTAN AND MICROFINANCE
Pakistan is situated in South Asia bordering the states of India,
Afghanistan, lean and China. With a population of 180 million people it
is the sixth most populous country in the world. According to the
Pakistan 1998 census, the urban population of Pakistan could be as high
as 50%, (8) which signifies that poverty is not just a rural phenomenon
and that the financing needs of the urban poor must be addressed equally
in Pakistan. An estimate by the State Bank Pakistan Annual Report in
2009 lists that 62 million Pakistani's live below poverty lines.
(9) Lahore is the second largest city in the country with a
significantly large urban population that lives under severe poverty.
(10) Apart from fears of escalating poverty the region is rendered
unstable by political insecurity, sectarian strife and rising
inflationary pressures. (11)
Compared to the global market, the microfinance sector in Pakistan
is small but not without prominence. At the end of 2010, total Pakistan
microfinance borrowers stood at 2 million, of which 56% were women. (12)
It has been estimated by the State Bank of Pakistan Microfinance
Department that there is immense potential for growth of microfinance in
Pakistan as only 7% of the local market has been tapped. (13) The impact
assessment of Pakistan microfinance sector is plagued by a lack of data
about microfinance borrower profile and inconsistency in recording of
their respective loan profile. (14)
LITERATURE REVIEW
Though no clear evidence exists to support the positive impact of
microfinance on the global economy in terms of eradication of poverty,
(15) many analysts agree that loan provision to women from poor
households improves their quality of life. (16)
It has been found that majority of working women in Pakistan are
middle-aged mainly because they have older children and can better
manage paid-work and domestic responsibilities compared to younger
women. (17) Additionally, working women in Pakistan are found to be
predominantly involved in home-based occupations due to the lack of
skills and because home-based work may be easily abandoned or stalled in
case of child-care or household emergencies. (18) Local analysts have
concluded that a void exists in support for paid employment of young
women between the ages of 15-19 due to lack of opportunities, education
and training. (19) Furthermore, it has been documented that 38% of the
time microfinance in Pakistan is used for non- business purposes (20)
and women borrowers are utilizing loan themselves only 36% of the time.
(21) The implication is that the majority of borrowers are not investing
in small businesses or are taking loans for use by male household
members.
Research suggests that microfinance women borrowers in developing
nations do not get spousal help in loan repayment and the main pressure
of repayment falls on the shoulder of the borrower herself and her
daughter. (22) Research has also indicated that microfinance is an
important support system for single mothers, widowed, abused and
abandoned women in developing nations. (23) Also of relevance is that
although microfinance benefits families from very poor backgrounds, the
majority of actual borrowers of microfinance are from moderately poor
backgrounds. (24)
Existing research shows that measuring the impact of microfinance
in the global economy is still in its infancy and reportage by
microfinance providers' is inconsistent, (25) thus preventing
accurate estimation of social development by micro finance services.
(26) It has been recommended that regionspecific studies should be
undertaken to ascertain microfinance borrower profile in order to better
ascertain the gaps in services and estimate extent of impact. (27)
With regard to the scarcity of data pertaining to microfinance
borrower profile, this study is aimed to ascertain 1) The demographic
characteristics of borrowers; 2) The household characteristics of
borrowers; 3) The loan profile of borrowers and 4) their occupational
change alter receiving the loan.
METHODOLOGY
A three-page questionnaire was developed for the purpose of data
collection from users (see Appendix A). The questionnaire was divided in
three parts and contained 35 questions related to demographic
characteristics, household characteristics and loan profile of
borrowers. A total of 149 women users of microfinance were interviewed
during a period of two weeks in January 2012. To avoid microfinance
provider bias an equal number of respondents were interviewed from two
banks (The First Microfinance Bank and Khushhali Bank Ltd.), two
institutes (Kashf and Damen) and one NGO (Center for Women's
Cooperation and Development). Site offices in five different districts
were selected to avoid geographical bias (see Appendix B).
Sampling was done through random selection of women users who
visited the microfinance provider site office for loan installment
returns. Voluntary participants were assured of their confidentiality
and anonymity. The questionnaire was administered through an interview
format in a private room at site offices, with researcher present to
complete questionnaires for illiterate respondents and provide
clarification and translation when necessary.
FINDINGS
Socio-demographic Characteristics of Borrowers
Table 1 shows data for demographic characteristics of borrowers
including age, marital status, educational attainment and combined
household income. Sixty-eight percent of borrowers are above 30 years of
age and their median age of borrowers is 37.5 years. Findings suggest
that middle-aged women have more time for work as they have passed the
age of child-bearing and have older children who can share in the
household activities. In contrast, younger women have less time to
participate in labor force due to child-bearing responsibilities,
illness of young children and lack of available substitution help. The
data in Table i further shows that the majority of the borrowers are
currently married and living with their husbands (78%), and a
significant portion of borrowers (60%) are illiterate. The average
combined monthly household income for borrowers is PKR 20,594. After
combining average household income (PKR 20,594) and average number of
household people (7.2), it was found that the average per day income for
each household member is approximately PKR 95. After conversion to US
Dollars it was ascertained that despite loan utilization, borrowers are
still living below international poverty lines of USD 1.25. (28)
Household Characteristics of Borrowers
Table 2 shows the household characteristics of borrowers. The
majority of borrowers live in husband-headed households. This may imply
that husbands encourage their wives to take loans and contribute to
household income due to economic necessity. The data shows that the
majority of the borrowers live in purchased houses, with 2% paying
installments for fullownership. Borrowers who live with relatives (13%)
do not pay conventional rent to a proprietor. Thus, it is significant
that nearly 86% borrowers of microfinance are not constrained by housing
rental expenses. Nearly all borrowers (93%) live in cement houses. The
data in Table 2 shows that the majority of borrowers (68%) have a large
family size of 6 people or more and live on average in 2 rooms.
Table 3 shows that no significant borrowers listed non-access to
basic utilities like drinking water, electricity and gas. However, many
borrowers mentioned that problems related to load-shedding of
electricity and gas had hindered home-based production, necessitating
the use of wood as a cooking substitute. Additionally, it is of concern
that significant number of borrowers indicated lack of access to key
consumer durables such as PC, air-cooler, refrigerator and vehicle.
Although most borrowers are poor urban dwellers, they do not live in
urban slums as defined by UN-HABITAT. (29) Findings indicate that many
borrowers may be classified as living in non-slum conditions because 1)
they live in cement houses (93%); (2) they live in owned houses (71%);
(3) they on average have 3.5 persons living in each room (average
respondents living in house 7.2 divided by average rooms per house 2);
4) they have access to toilet facility with flush (84%); and 5) they
have access to safe drinking water (97%).
Loan Profile of Borrowers
Table 4 presents data about the loan profile of borrowers,
indicating that the majority of the borrowers (60%) are recent borrowers
with a loan history for the last two years. Most of them (85%) have a
loan of between PKR 10,000-35,000; whereas only 4% get a loan between
PKR 50,000-60,000. This is due to the limitations of microfinance
providers' in permitting excess loan to low-income households. It
was discovered that the average loan amount is PKR 26,829; whereas
according to SBPMD the average loan amount for Pakistan Microfinance
Sector is PKR 12,131. The difference is mainly due to non-inclusion of
rural population in the sample. Rural populations have lower income
mainly from agricultural produce and consequently receive smaller loans
from microfinance providers'.
Overall, it is important to note that 94% of the borrowers use the
loan for business purposes, and 6% of them use it for domestic
consumption needs, indicated to be due to the pressure of rising costs
or due to personal emergencies. 73% of the borrowers use the loan for
themselves and a significant portion (58%) receive assistance from other
household members in paying back the installment dues. The most
prominent helper is indicated to be husband (28%), followed by son (9%).
Though considerable family support exists in terms of loan repayment, it
is notable that 42% of the borrowers are expected to invest business
profits in household and children but receive no assistance in loan
repayment.
Table 5 summarizes the loan packages offered by the different
microfinance providers' in the present study, as described by the
respondents. Two important features of the loan package are noted.
First, the total interest rate charged (or total profit-sharing as in
the case of CWCD) on total loan amount ranged from 20-29%; and second,
the monthly interest rate as a percentage of the total loan amount
ranges from 10-11%. Findings clearly indicate that no significant
difference exists amongst borrowers in relation to monthly interest rate
payments and that the study group is fairly homogenous in terms of rate
payment features of the loan package and interest rate burden. This
suggests that microfinance providers' provide a similar loan
package to borrowers across urban regions and that loan amount and
interest rates are being curtailed according to a borrower's
household income to prevent the risk of default.
Occupational Change after Loan Taking
The data from table 6 shows that nearly all borrowers belong to the
informal sector of the economy, characterized by non-inclusion of labor
contracts, non-reportage of income and unpredictable work patterns.
Significantly loan-taking has resulted in declining unemployment by 15%.
The majority of the borrowers (60%) are currently occupied in work
related to embroidery and stitching (36%), running a retail store
(9%),parlor work (8%) and warehouse purchasing and retailing (7%). The
latter occupation includes purchase of wholesale stock, such as used
goods, cloth and food products, packaging them into smaller units and
selling them in the retail market or directly to buyers (from home, from
a rented shop or on a vendor). The borrowers' occupations indicate
that they needed the microfinance loan for liquidity at beginning of
month and for purchase of supplies and stock. Of importance is that many
borrowers (45%) conduct their businesses from home, such as embroidering
and stitching work using rooms in the house for commercial ventures
(retail store, beauty parlor or health-worker office), agricultural
production, giving tuitions from home or retailing from a vendor placed
outside home. Findings suggest that microfinance utilization has not
helped borrower to enter into formal sector of the economy, which would
have an impact on their sustainable income.
Conclusion
It has been discussed in the introduction that analysts of the
microfinance sector, both global and regional, are in agreement that
policy improvements can be planned based on the mapping of
borrowers' profiles. (30) The present study is an effort to examine
the demographic characteristics of women borrowers of microfinance,
including data pertaining to their household characteristics, loan
profile and occupational change after loan-taking.
This study confirmed the other research findings that microfinance
loans are availed predominantly by middle-aged women who are living in
husband-headed households. (31) Thus, though some analysts have
suggested that women under the age of 19 are in need of paid work
opportunities in this region, (32) this project concludes that this age
bracket is not part of microfinance borrower base. It may be that
younger women are not loan recipients because they have younger children
who can not be left alone during work and have child-bearing pressures
which leave them less time for small business mobilization. It is
recommended that further studies assess the nature of structural
barriers related to younger women's employment opportunities and
child-care support.
Increase in poverty and rising inflation rates of the region have
given rise to dual-worker families, with more women participating in
income generating activities to fulfill the financial needs of their
households. Microfinance is provided mainly to dual-worker families with
more married women constituting the borrower base. Arguably the
microfinance providers' are reluctant to issue loans to
disadvantaged women (e.g. single, widowed, separated or divorced) since
they have lower household income compared to dual-worker households.
The study also shows that the majority of borrowers do not live in
rental properties. This may imply that low-income women who have to pay
house rents do not choose to take loans out of fear they will not be
able to bear the burden of loan repayment. Alternatively, it may also
mean that microfinance providers' regard rent-paying households as
less credit-worthy for loan repayment, thus limiting loans to women who
live in owned households or with relatives.
Microfinance is understood to be a valuable tool for women's
development when it targets disadvantaged women, (33) including not just
those from poor families but also women who have lower household income
due to their single, widowed, separated or divorced status. Although a
small percentage (22%) of microfinance loans has helped disadvantaged
women to mobilize small businesses, consistent investment in services
and monitoring of borrower portfolio will help in further expanding the
base of those who can benefit from microfinance services.
It is true that few borrowers have indicated a lack of access to
household utilities, but a recurrent and highlighted problem is the
deficiency of energy supply. Of importance is that borrowers on average
are not living under UN-HABITAT defined conditions of 'urban
slums'; and are instead mainly living in cement houses that they
own, with fewer than three people on average living in one room, with
access to toilet with flush and safe drinking water.
The lack of access to personal computer is another reminder that
borrowers are disconnected from production information and are running
low- income businesses without the benefits of technology, internet
communication and the advantages of online business awareness. Notable
is also the fact that borrowers live without necessities such as
refrigerator, air-conditioner and air-cooler in extremely hot climate,
which is detrimental for their productivity and well-being in general.
Significant indications of non-ownership of personal vehicle and washing
machine emphasize the burden of domestic duties and transportation
during business involvement.
It has been mentioned that borrowers on average live below the
poverty lines despite microfinance utilization. In other words, the
loans have not been sufficient to expand business and income in order to
eliminate poverty in borrower household. It may be that microfinance
providers' have limited their loan amount to prevent client
default. It is recommended that successful repeat clients of
microfinance be provided larger loans with lower interest rates so they
may expand their business.
Although most borrowers utilize the loans for their own businesses,
a significant proportion of them have taken loans for household members,
mainly their husbands. It is of concern that utilization of loan by
those other than the borrowers may not be directly beneficial for
women's development or ensure investment of business returns in
household and in their children, which is the original aim of
microfinance services. This clearly warrants the need for prudent policy
with regard to loan approval by microfinance providers.
There is indication that borrowers receive family assistance for
their loan repayment, with predominant help coming from their husbands.
However, nearly half of the borrowers do not receive family assistance
in repayment, which is an issue of concern given that women have
multiple responsibilities, including paid-work, domestic work,
child-care duties and loan repayment burden. One noteworthy finding of
this study is that loan repayment assistance generally comes from the
husbands, not daughters as suggested by other research. (34) This is an
important and positive factor because, if the reverse were true, it
would mean that microfinance had a negative impact on the education and
general welfare of female children.
The average loan taken by borrowers indicated in this study is
higher than the national average mainly due to the exclusion of the
rural population in the sample. Additionally, the monthly interest rate
on average does not exceed 11% of total loan amount, demonstrating that
borrowers have no excessive burden of loan repayment. This is good for
borrowers and microfinance provider alike as it minimizes default;
however concern exists that without injection of larger loans and
expansion of services to more disadvantaged client base a more holistic
social development and poverty elimination would not be possible.
After borrowing, employment has increased by 15%; yet 25% of the
respondents still remain unemployed. This again stresses need for
prudent microfinance provision in terms of ensuring use of loan by
borrower herself for business needs and income generation. Most of the
working borrowers (45%) are involved in home-based occupations in the
informal sector of economy, with 'embroidery and stitching'
being the most popular pursuit. Though working from home has its
advantages, work-related opportunities and development may also be
limited due to the simultaneous demand of domestic responsibilities. It
is recommended that further studies are undertaken to ascertain if this
is a personal choice for the women borrowers or a result of
'adaptive preferences' given cultural restraints. (35)
According to Kashf Foundation, (36) microfinance providers' in
Pakistan have little funds for non-financial services due to rising
operational costs in a weak economy, increased cost of borrowing from
commercial banks, higher rate of fraud in returning installments and
general political instability. The investigation suggests that another
reason for the fact that only 7% of the microfinance market is being
tapped in Pakistan (apart from problems suggested by Kashf Foundation)
stems from the reluctance of microfinance provider to issue loans to the
poorest groups who are more disadvantaged than the current borrower
base.
Microfinance is largely considered as an important tool in
initiating small-scale businesses and reducing poverty in marginalized
sections, particularly women, in developing societies. The
acknowledgement for the need of microfinance services is evidenced by
the high percentage of new borrowers completing their first or second
year cycle (60%). Additionally, there are significant other positive
effects in empowering the poorest women in terms of strengthening their
gender equality status in the community and giving them increased
autonomy in the household for decision-making. Poverty elimination is
not possible without tackling problems of the poorest of the poor.
Non-inclusion of the poorest income classes in microfinance provider
client-base indicates that rather than social development and poverty
elimination the main aim of microfinance providers' is commercial
sustainability. Need exists for microfinance donor bodies and regulatory
bodies to support and encourage provision in terms of broadening client
base to include women from the poorest households.
All in all, the need for microfinance provision to women exists due
to the fact that the typical borrowers live below the poverty lines with
high illiteracy rate and few employment opportunities in the formal
sector of the economy. Additionally regional problems stemming from
political instability, rising inflation and lack of commercial banking
loan provisions make the role of microfinance services even more
instrumental in advancing the economic and social development of poor
women. Policy interventions are needed to make microfinance sector more
prudent in loan provision, expand services to include other groups of
disadvantaged women, especially those who have to pay house rent and
those who are single, widowed, separated or divorced. This finding
supports conclusion by Goldberg (37) that although microfinance benefits
families from very poor backgrounds, the majority of actual borrowers of
microfinance are from moderately poor backgrounds.
Acknowledgements
The researchers would like to thank the reviewers' for their
feedback and guidance for improvement. Also, the respective heads of
departments of the microfinance providers' who gave the initial
acquiescence to facilitate the study must be thanked, namely: Mr. Kamran
Azim (Manager Operations, Kashf), Ms. Salimah Shiraz (Communications
Head, First Microfinance Bank Ltd), Mr. Shahid Chaudhry (Regional
Operations Manager, at Khushhali Bank Ltd.), Mr. Naveed Aslam
(Operations Manager CWCD), Ms. Naghma Rashid (Country Director, Damen).
Lastly, the individual Branch and Site Managers must be acknowledged for
facilitating data collection at their respective offices, namely: Ms.
Faeza Ashrafand Ms. Saira Yusuf (Kashf), Mr. Nadeem Suleiman (First
Microfinance Bank Ltd) Mr. Asif Mansha (Khushhali Bank Ltd.) Mr. Imran
Ali (CWCD) and Mr. Rana Khurram Subhani (Damen).
Appendix A
Study Questionnaire
Section I: User demographic Characteristics
Q1. How old are you?
Q2. What is your current Never Currently Divorced
marital status? Married Married
Separated Widowed
Q3. Are you currently If No, whom do you live with:
living with your Spouse?
Yes No
Q4. What is your highest Illiterate Primary Secondary
educational degree?
BA/BSc MA/MSc PG NF
Q5. What is your spouse's Illiterate Primary Secondary
highest educational
degree? BA/BSc MA/MSc PG NP
Q6. What is your current
occupation?
Q7. What was your
occupation before
availing microfinance?
Q8. What is your
husband's occupation?
Section II: Household characteristics
Q9. What is monthly
combined household
income?
Q10. What is your
relationship with the
head of household?
Living
Q11. The house you are with
living in is? Owned Rented relatives Other
If option 4, specify:
Q12. What is the total No Relation No Relation
number of persons living
in household?
Q13. How many Rooms
are there in your house?
Q14. What kind of Cement Mud Other
material is house
made of?
If option 3, specify:
Hand/
machine
Q15. What type of Tap water pump Other
drinking water is
available in your
household?
If option 3, specify:
Q16. Do you have Yes No
electricity connection
in connection in your
house?
Q17. Do you have gas Yes No
connection in your house?
Q18. What type of energy Gas Oil Coal Wood Other
is being used for
cooking?
If option 5, specify type:
Toilet Toilet
without with
Q19. Do you have toilet No toilet flush flush
facility in your house?
Q20. How do you dispose Dump it Burn it Carry to
your garbage? outside public
house disposal
Garbage Other
collector
visits
If option 4, specify frequency (d/w):
If option 5, specify:
Q21. List the type of consumer durables and HH assets you own:
a. TV Yes No
b. Radio Yes No
c. Cable Yes No
d. Refrigerator Yes No
e. Sewing Machine Yes No
f. Washing Machine Yes No
g. Personal Computer Yes No
h. Air-Conditioner Yes No
i. Air Cooler Yes No
j. Please indicate which Bicycle Motorcycle Car
type of vehicle is
available in the house. Rickshaw No Multiple
vehicle vehicles
k. Land-line
l. Mobile
Section III: Loan Profile
Q22. How long have you
been utilizing
microfinance loan?
Family-
Q23. What is the nature Group Individual Group Other
of loan?
Q24. What is current loan
amount (in PKR)?
Q25. What is monthly loan
repayment installment
(in PKR)?
Q26. What are reasons for
utilizing microfinance
loan?
Q27. Did the loan officer Yes No
provide you complete
information about proper
utilization of loan?
Q28. Did you receive any Yes No If yes, what that training
skill development was about?
training from your loan
provider?
Q29. Did the amount of Yes No
loan satisfy the purpose
for which loan was taken?
Q30. Are you required to Yes No If No, skip to Q.33
attend any meeting with
regard to monitoring the
[TEXT UNREADABLE IN
ORIGINAL SOURCE]
Q31. What is the focus of Only installment issues 1
discussion in these 1 + employment issues 2
meetings? 1 + 2 + regional & legal issues 3
1 + 2 + 3+ HH & personal issues 4
Other 5
If option 5, please specify:
Q32. Are you satisfied Yes No If No, specify reason:
these meetings?
Q33. Are you satisfied Yes No If No, specify reason:
with the amount of
repayment installment?
Q34. Does anyone help in Yes No If Yes, specify who:
repaying installments
dues?
Q35 How much of the loan
that you have taken has
been invested?
Appendix B
Administrative Towns of urban Lahore
[ILLUSTRATION OMITTED]
Administrative Towns Data Collection Zones Microfinance
of Lahore * Provider
1. Ravi Town
2. Shalimar Town
3. Wagah Town North of W agah Town FMFB
4. Aziz Bhatti Town
5. Data Ganj Baksh Town
6. Gulber Town
7. Samanabad Town North-West of Samanabad Town KBL
8. Nishtar Town South of Nishtar Town Kashf
North-West of Nishtar Town Damen
9. Lahore Cantonment South-west of Lahore CWCD
Cantonment
Key:
Administrative towns as defined by Lahore City District Police Site
2012
NOTES
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Pakistan", State Bank of Pakistan Microfinanee Department, (January
2011). Retrieved from:
http://www.sbp.org.pk/MFD/Strategic-Framework-SM-24-Jan-2011.pdf.
(14.) Ibid.
(15.) Maren Duvendack, Richard Palmer-Jones, James G Copestake, Lee
Hooper, Yoon Loke and Nitya Rao, "What is the evidence of the
impact of microfinance on the well-being of poor people?",
Systematic review (August 2011) London: EPPI-Centre, Social Science
Research Unit, Institute of Education, University of London. Retrieved
from: K"http://www.dfid.gov.uk/R4D/PDF/Outputs/SystematicReviews/Microfinance2011Duven dackreport.pdf."
http://www.dfid.gov.uk/R4D/PDF/Outputs/SystematicReviews/Microfinance2011Duvenda ckreport.pdf.
(16.) Nasira Jabeen and Muhammad Zafar lqbal, "Gender and
Local Governance in Pakistan: Promoting Participation through Capacity
Building", Journal of South Asian Studies, 25, 2, p: 255-281
(July-December 2010). Retrieved from
http://pu.edu.pk/images/journal/csas/PDF/05-Dr.%20Nasira%20Jabeen.pdf.
(17.) Rana Ejaz Ali Khan, "Labor Force Participation of
Married Women in Punjab (Pakistan)," (with Tasnim Khan).Journal of
Economic and Social Research, 11, 2 (2009). Retrieved from:
http://jesr.journal.fatih.edu.tr/jesr.%20khan.pdf.
(18.) Ibid.
(19.) Ayesha Khan, "Women and Paid Work in Pakistan: Pathways
of Women's Empowerment," South Asia Research Program, Pakistan
Scoping Paper (2007). Collective for Social Science Research, Karachi.
Retrieved from: http://www.researchcollective.org/Documents/Women_Paid_Work.pdf.
(20.) Samia Mahmood, "Microfinance and Women Entrepreneurs in
Pakistan," International Journal of Gender and Entrepreneurship, 3
(3): p. 265 - 274 (2011). Retrieved from: 10.1108/17566261111169340.
(21.) Soofia Mumtaz, "Targeting Women in Micro-finance
Schemes: Objectives and Outcomes", The Pakistan Development Review,
39, 4 Part II: p. 877-890, (Winter 2000). Retrieved from:
http://www.pide.org.pk/pdf/PDR/2000/Volume4/877- 890.pdf.
(22.) Linda Mayoux, "Women's Empowerment through
Sustainable Micro-finance: Rethinking 'Best Practice",
Discussion Draft (2005). Retrieved from:
http://www.sed.manchester.ac.uk/research/iarc/ediais/pdf/WomensEmpowermentthroug hSustainableMicrofinance.pdf.
(23.) Nathanael Goldberg, "Measuring the Impact of
Microfinance: Taking Stock of What We Know," Grameen Foundation USA
Publication Series (2005). Retrieved from: PERLINK"
http://www.givewell.org/files/Causel-
2/Independent%20research%20on%20microfinance/GFUSAMicrofinanceimpactWhitepaper- 1.pdf."
http://www.givewell.org/files/Cause12/lndependent%20research%20on%20microfinance /GFUSA-MicrofinancelmpactWhitepaper-1.pdf.
(24.) Ibid.
(25.) Asad K. Ghalib, "The impact of Microfinance and its role
in Easing Poverty of Rural household's: Estimations from
Pakistan," (with Issam Malki and Katsushi S. Imai) Discussion paper
28, Research Institute for Economics and Business Administration, Kobe
University (2009). Retrieved from:
http://www.rieb.kobeu.ac.jp/academic/ra/dp/English/DP2011-28.pdf.
(26.) Microfinance Rating Market Review 2011,
PricewaterhouseCoopers Sarl, Luxembourg. Retrieved from:
http://www.ratinginitiative.org/fileadmin/media/publications/Rating_Market/RMR_2 011.pdf.
(27.) Linda Mayoux, "Women's Empowerment through
Sustainable Micro-finance: Rethinking 'Best Practice".
(28.) The average per day income for each household member is
approximately PKR 95. After conversion to US Dollars the average income
per day for borrowers is USD 0.98, which is below international poverty
lines of USD 1.25. Conversion- PKR 95 day, USD exchange rate--97.32;
Exchange rate source: http://themoneyconverter.com/USD/PKR.aspx, Access
date 01/28/2013.
(29.) United Nations Human Settlements Programme (UN-HABITAT),
State of the World's Cities (2006-7), The Report for Millennium
Development Goals and Urban Sustainability. Retrieved from:
http://www.unhabitat.org/documents/media_centre/sowcr2006/SOWCR%205.pdf.
(30.) microfinance Rating Market Review 2011.
(31.) Rana Ejaz Ali Khan, "Labor Force Participation of
Married Women in Punjab (Pakistan)," (with Tasnim Khan).
(32.) Ayesha Khan, "Women and Paid Work in Pakistan: Pathways
of Women's Empowerment."
(33.) Linda Mayoux, "Women's Empowerment through
Sustainable Micro-finance: Rethinking 'Best Practice."
(34.) Linda Mayoux, "Women's Empowerment through
Sustainable Micro-finance: Rethinking ' Best Practice."
(35.) Martha C. Nussbaum, Capabilities as Fundamental Entitlements:
Sen and Social Justice, Feminist Economics, 9, 2-3: p.33-59, (2003).
Retrieved from: http://avforensics.org/healthcare/Nussbaum.pdf.
(36.) Kashf Foundation "Financial Services for All."
(37.) Nathanael Goldberg, "Measuring the Impact of
Microfinance: Taking Stock of What We Know."
By Sara Riza Jafree and Khalil Ahmad *
* Sara Riza Jafree is lecturer and Ph.D. Research scholar Institute
of Social and Cultural Studies, University of PunJab Gullong, Pakistan,
Her research interests are: Runda Studies, Women's Revolt against
Patriarchy, Polygamy, Traditional and Aelgian Organizational Problems
and Organization Theory. Khalil Ahmad, Ph.D., is Assistant Professor,
Institute of Social and Cultural Studies, University of the PunJab,
Lahore, Pakistan. His research interests are: Social Gerontology,
Demography, Population Development, Medical Sociology, Reproductive
Health, Health Aging, and Chomic conditions and disability.
Table 1. Demographic Characteristics of Borrowers
Variable label Category label Borrowers
Age groups 20-24 14%
25-29 18%
30-34 21%
35+ 47%
Marital status Currently Married 78%
Widow 09%
Separated 02%
Divorced 02%
Never married 09%
Level of Education No schooling 61%
Prim 19%
Second 17%
Graduate and above 03%
Monthly Household Income < 10,000 12%
11-19,000 38%
20-29,000 33%
30-39,000 11%
40,000 + 06%
Table 2. Household Characteristics of Borrowers
Variable label Category label Borrowers
Relationship with head of Self 08%
household
Wife 74%
Daughter 10%
Daughter-in-law 04%
Sister 04%
House ownership Owned 71%
Rented 14%
Living with Relatives 13%
Paying Installments for 02%
Ownership
Household material Cement 93%
Mud 04%
Other * 03%
Persons living in household [greater than or equal to] 3 09%
4-5 23%
6 and above 68%
Rooms per household 1 room 17%
2 rooms 42%
3 rooms 28%
4 + rooms 13%
Table 3. Household Utilities and Consumer Durable List
Variable label Category label Access/ No
Own: Access/Do
not own
Utilities Access to Clean Drinking 97% 03%
Water
Electricity Connection 98% 02%
Gas Connection 83% 17%
Toilet Facility with flush 84% 16%
Visitation by Garbage 59% 41%
Collector
Consumer Durables TV 94% 6%
Radio 22% 78%
Cable 75% 25%
Refrigerator 54% 46%
Sewing Machine 70% 30%
Washing Machine 59% 41%
Personal computer 05% 95%
Air-conditioner 00% 100%
Air-cooler 10% 90%
Vehicle 62% 38%
Mobile 100% 0%
Landline 05% 95%
Table 4. Loan Profile of Borrowers
Variable label Category label Borrowers
Length of loan utilization 1-2 60%
3-4 28%
5 + 12%
Loan Amount (PKR) 10-19,000 24%
20-29,000 33%
30-39,000 28%
40,000+ 15%
Loan Purpose Business 94%
Personal Needs 06%
Loan Used B Self 73%
Husband 17%
Son 06%
Daughter 02%
Brother 02%
Assistance received from Yes 58%
household members
No 42%
Table 5. Summary of Interest Allocation by Microfinance Providers
Microfinance Interest charged for TLR (1) MIR (2) MIR
Provider PKR 10,000 loan of 12 (PKR) (PKR) as %
months of
TLA (3)
1. Kashf 20% 12,000 1,000 10%
2. FMFB 22% 12,200 1,017 10%
3. KBL 29% 12,900 1,075 11%
4. CWCD 20% (profit-sharing) 12,000 1,000 10%
5. Damen '90 paisa per 1000 per 11,815 1,000 10%
day'
Key:
1-TLR = Total Loan Amount to be Returned
2-MIR = Monthly Installment Return
3-TLA = Total Loan Amount
Table 6. Change in Occupation after Loan-taking
Occupation Before Loan After Loan
Housewife/unemployment 40% 25%
Embroidery & stitching from home 33% 36%
Running a retail store
Shop on rent 03% 03%
from home 03% 06%
Agriculture production from home 09% 06%
Parlor-work
Shop on rent 02% 02%
from home 02% 06%
Gives tuitions from home 03% 03%
Family health worker
Office on rent 02% 02%
Consultation from home 00% 01%
Domestic employee 02% 03%
Warehouse purchase and retailing 01% 07%
100% 100%
