The Growth rate of Pakistan’s Microfinance Sector is not as high as expected. The anticipation was rise in sector growth once it enters the growth stage from the introductory stage but this has failed to happen. The paper aims to look at the reasons because of which the formal sector has growth rate lower then what international agencies like ADB and the federal government expected. For this 10 year data of the sector has been analysed from start of growth period in 2007 to 2016. The main constraints faced by the sector are access, sustainability, innovation, efficiency and risk management. This study examines the current environment of financial market in Pakistan against the contextual history of sustained fundamental limitations that refrain the sector’s growth.