Impact of Microfinance on Socio-Economic Conditions of the Borrowers: A Case Study of Akhuwat Foundation (Lahore)

Hassan Hamza Zaidi
Additional contact information
Hassan Hamza Zaidi: Economics Teacher, IB DP\MYP

European Journal of Multidisciplinary Studies Articles, 2017, vol. 2

Abstract: Akhuwat Foundation is the leading microfinance institution in Pakistan which provides interest free loans for small businesses to the poorest people of society. Since its launch in 2001, it has disbursed a sum of -110 million to 1.9 million families without any collateral and with a recovery rate of 99.93 percent. Such a remarkable achievements by a nonprofit organization makes it a leading interest free (Qarze e Hasna) institution in the world. This study attempts to find the impact of Akhuwat Foundation’s microfinance on socio-economic conditions of the borrowers. Based on primary data collected from old and new borrowers, the study analyzes the impact of microfinance on wellbeing of the borrowers’ households in terms of their housing conditions, food security, children’s education, poverty status, monthly income and expenditures of the borrowers before and after the loan with the help “with or without approach†. Moreover, a non-parametric approach is used to test the difference between old and new borrowers in terms of their consumption expenditure, income, poverty status, housing improvement, access to education, and access to medical facilities. Our results show that Akhuwat’s loans have significantly improved the conditions of the borrowers in terms of their monthly income, expenditures, access to education/ health, and household assets. The impact was much larger for old borrowers than new borrowers. In the end we concluded that Akhuwat’s non-traditional approach of lending to the poor and its model of mutual brotherhood between lenders and borrowers presents great lessons to bring positive change in the society.

Keywords: microfinance; Pakistan; poverty (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://brucol.be/index.php/ejms/article/view/5956 (text/html)
https://brucol.be/files/articles/ejms_v2_i7_17/Hassan.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eur:ejmsjr:315

DOI: 10.26417/ejms.v6i2.p239-248

Access Statistics for this article

More articles in European Journal of Multidisciplinary Studies Articles from Revistia Research and Publishing
Bibliographic data for series maintained by Revistia Research and Publishing ().