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Key Words. Impact, Microcredit, Empowerment, Women, Pakistan.
Women empowerment growth has been observed an increasingly as this is core aspect of the poverty reduction strategy. The term women empowerment has become most popular in the field of development since 1980 (Batiwala, 1994). Empowerment refers to the control over resources and ideology (Ibid). The process of women empowerment should change the patriarchal relations and though necessarily leads to change the men's typical control over women (Batiwala, 1994). In current situation rural women's are suffering more as compared with semi urban or urban women because mostly are not educated. Consequently, if they have knowledge of microcredit and its effects then absolutely they will take benefit from this facility and can also build their children's empowered. Women empowerment is as necessary as country development is because "Healthy Mothers Build Healthy Nations".
Microcredit Summit Campaign, 2001 reported, 14.2 million of the world poorest women have access to the financial services through particular Microfinance Institutions (MFI's), banks, Non Governmental organizations (NGO's) and other informal financial resources. They are nearly 74% of the 19.3 million of the world's poorest people and are served through these financial institutions (Susu. C and Lisa. K. 2002). Microcredit can overcome the poverty and hunger and other core goals of Millennium Development Goals (MDG's) especially in the global south. Sunatar and Ziyodullo, 2008, described the impact of microcredit on all MDG's. According to their study, certainly the microcredit covers the MDG's and also helpful to achieve the goals in the urban as well as in the remote areas.
Microcredit has been defined as commercial and developmental tools, which actually serve the microcredit entrepreneurs and its credit range is from $50 - $5000 (Anna. O, 2002). Microcredit is playing a pivotal role in the roots of Pakistan's developmental rural projects. Since 1947, Pakistan came to exist and inherited the vulnerable poverty. Women also took this burden equally because they are almost 50% of total population (FBS-2009). The actors of this segment presumed that with the microcredit facilitation, poverty can be downsized up to 33% in the whole country (Haroon. J, 2008). Microcredit has been considered as the latest solution for poverty elevation. Microcredit has become an important factor in creating the self reliant, creative activities and engaging the women in economically and productive activities (Haroon, J. 2008).
Currently, there are 3000 estimated financial institutions are operating in the developing countries. These institutions have helped many countries to reduce poverty and put them on the way of success. And this is only happened through the small credit facility to the poor's of the country particularly women. Many institutions from them are providing the credit without collateral and at very tiny interest rate and very easy terms and conditions (Asif.J. M.Luqman, Ahmed.S. Ahmed. A, 2006). Numerous Micro Finance Institutions (MFI's) are working in Pakistan and are being operated by the public as well as private sector. Several rural support programmes are running under the Government of Pakistan (GoP). All MFI's felt empowering women through microcredit resulting real good change to boost the economy and livelihood household.
I will explain the concerned detail about the microcredit institutions and its impact on women empowerment in next chapters along with the name of financial institutions and their field of expertise and targeted people. We can see the impact at the general people in the geographically specified located areas where these institutions are executing their activities. I will also analyze the research study of different authors in the field of above mentioned topic with impact assessment analysis of microcredit. MDG's are strongly interlinked with the microcredit and its impact is fruitful on overall goals of Millennium Development. Moreover, this study will assess the linkage between Poverty Reduction Strategy Papers (PRSP) and MDG's.
Micro Finance Institutions (MFI's) in Pakistan
Many developing countries executed their activities in microcredit sector after seeing the result of initiative by the Nobel Prize winner Muhammad Younas's Grameen Bank of Bangladesh. The growth in the field of Microcredit and its positive effects on livelihood of household reveal the success of its operations. Microfinance industry has been encouraged in Pakistan after the promulgation of Microfinance Ordinance, 2001. As a result of this ordinance the First Microfinance Bank has been established in Pakistan. Before this ordinance some NGO's and government sponsored rural support programmes were operating their activities. There is numerous microfinance institutions are working in Pakistan from public as well as private sectors. Both are serving in the field of microcredit and focusing the rural and remote areas. The list of these institutions is mentioned as under.
2.1 Public Micro Finance Institutions (MFI's)
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Pakistan Poverty Alleviation Fund (PPAF)
National Rural Support Programme (NRSP)
Punjab Rural Support Programme (PRSP)
Sindh Rural Support Programme (SRSP)
Balochistan Rural Support Programme (BRSP)
Thar Rural Support Programme (TRSP)
Orangi Pilot Project, Karachi (OPP)
Khushhali Bank (KB)
First Microfinance Bank (FMB)
First Women Development Bank (FWDB)
Benazir Income Support Programme (BISP)
Zari Tariaqati Bank Limited (former Agriculture Development Bank) (ZTBL)
Small and Medium Enterprises Bank (SMEB)
Small and Medium Enterprises Development Authority (SMEDA)
Other Public Financial Banks
The above mentioned programmes and banks are running under the government and particularly focusing on the development of rural areas and mitigating poverty. Many of them are working for women empowerment through microcredit schemes on easy loans on the basis of social collateral. Group financing is the best approach to offer loan to poor and encouraging women especially in the remote rural areas. It has been accepted in the modern world that empowering women through microcredit, microfinance and enterprises development is much effective to overcome the poverty and enhance the women's life standard (Malik and Luqman, 2005). It has also been reported that microcredit plays a vital role to reduce the vulnerability of the poor, through asset creation, income and consumption smoothing, provision of emergency assistance and empowering and emboldening women by giving them control over assets and increased self-esteem and knowledge (Zaman, 2001, citied in 2005). Women's are observed more dedicated to their family and can handle the whole family within minimum resources. They are running many cottage industries through microcredit and it has a fruitful effect on the whole family because this income is considered as an additional cash income. It has a quite different effect on the welfare of the children and women, depending in whether the recipient of that income is male of female (Ellis, 2000). If women's are running any small business by their own then they are not accountable to their husbands. Hence, they use to save that income and spent it on the welfare of family members particularly children's when it requires for health, education, food and clothing.
Some of above mentioned public financial institutions have collaboration with NGO's and other organizations in private sector. They are carrying out their activities through these organizations i.e. Khushhali Bank is not particular gender specialised programme in rural areas but they are working with third party organization, Family Planning Association of Pakistan (FPAP) (Salman, A. 2008). Khushhali bank is specifically focusing on Millennium Development Goals (MDG's) and we will further look the situation in coming chapter.
2.2 Private Micro Finance Institutions (MFI's)
Agha Khan Rural Support Programme (AKRSP)
Community Support Concern (CSC)
Centre for Women Cooperative Development (CWCD)
Private Financial Banks
Private financial institutions have a pivotal role to enhance the livelihood of rural households as well as urban slums. The services by private sector have started been since 1980 by the Agha Khan Rural Support Programme (ARKSP). Initially, AKRSP's focus was in Northern areas and Chitral but after some time they started their activities at urban slums of Karachi. Rural Support Programme (RSP's) has started their operations after inspiring by the AKRSP success. The basic purpose of these organizations was to provide the subsidized credit to poor people and carrying efforts to achieve their poverty reduction strategy (Shahnaz, A.R and Tahir, Mehmood, 2009). Mostly financial institutions are executing their activities in Punjab province. Many of them have focus on the women empowerment and enhancing their livelihood through soft microcredit schemes particularly in the rural areas. But some of them are working with urban slums as well and those organizations have very good results in terms of enhancement in life standard. Some organizations are offering credit only small farmers to enhance the agriculture production and their livelihood as well. But after reviewing the literature, it has been observed couple of NGO's are specifically working on women empowerment through microcredit to enhance their cottage industry or small enterprises.
Although the efforts are being performed in this sector specially women empowerment and increasing the livelihood is not enough. But with these small efforts, we can overcome the household issues and problems regarding their livelihood. KASHF foundation is the leading NGO in the microcredit concerning women empowerment in private sector (Salman, A. 2008). KASHF major projects are running in the Punjab province. The main purpose of microcredit for women is to utilize the human capital and increase their income up to certain level. Consequently their social moral, economic situation of household will be increased. The general hypothesis is that women are more likely than men to spend cash resources under their jurisdiction on basic household needs (Kabeer, 1998). This shows women are performing triple role in the society i) Re-productive role, ii) Productive Role, iii) and community role but are too efficient in business and day to day expenses. These NGO's are offering microcredit in the field of agriculture, livestock and cottage industry. The example of Gambia in 1980 depicts the women income was enhanced by promoting irrigation, high yielding varieties of rice traditionally regarded in that country as a crop under female control (Ellis, 2000). Keeping this view in mind many NGO's has start serving the women through microcredit to increase their livelihood KASHF foundation is one of them. KASHF is now considered as one of the leading NGO's offering microfinance in the rural as well as urban areas of Pakistan.
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