4. Introduction
Many poverty alleviation program initiated by the government to alleviate poverty.
The result of these programs disappointed due to corruption cause discouragement
and unfair practiced. Micro credit seems to provide a permanent source of income.
Its primary objective is to enable the poor to change their life style positively and
make better than previous.
To fight against poverty is a very significant and imperative goal .In our country
there is great potential of micro credit banks and markets where thirteen million
adults can avail this facility. This number is likely to enhance with growing
population. Khushali bank Limited was initialized in 2000 as a part of the
Government of Islamic Republic of Pakistan’s poverty Reduction strategy and its
Micro credit Sector Development Programs. MSDP was developed with the
assistance of Asian Development Bank. With its headquarters in Islamabad
Khushhali Bank Limited operated under the supervision of the State Bank of
Pakistan and various central (Commercial) banks are its shareholders.
5. Microfinance Institutions in Pakistan
Aga Khan Rural Support Program
Sarhad Rural Support Program
Rural Support Program
Apna Microfinance Bank Ltd. (formerly NMFB)
FINCA Microfinance Bank
Khushali Bank Limited,
National Rural Support Programme Bank Ltd. (NRSP Bank),
Pak-Oman Microfinance Bank Ltd. (POMFB),
Tameer Microfinance Bank Ltd. (TMFB),
The First Microfinance Bank Ltd. (FMFB),
The Punjab Provincial Cooperative Bank Ltd ,
U Microfinance Bank Limited,
Waseela Microfinance Bank.
6. Significance of the Study
The study will be helpful to see the improvement in
economic status of the people after utilizing micro credit
facility. Micro finance has recently emerged as an
integral tool for poverty alleviation. Keeping in view the
significance of the Micro Finance Training, IRM
Institute of Rural Management has designed
comprehensive training modules to meet the demands of
the poor communities.
The programme is continuously developing and is
providing support to the micro finance institutes at
national and international level through training and
experiential learning.
7. Objectives of study
• To study the micro credit as a positive change in
the society .
• To highlight the ways to help reducing poverty,
improve the living standard of the poor people
on suitable condition and increase the growth.
• To analyse the role of microfinance bank in
making people self-sufficient and self-employed.
8. Literature Review
In modern areas, poverty is known to be the breeding ground for conflicts between
nations and terrorism. Poverty is a wide spread world problem particularly for the
developing countries like Pakistan, Bhutan, Bangladesh and Sri Lanka etc.
Different policies, strategy and programs have been formulated and adopted for at
least reducing this problem such as special poverty alleviation programs and short
term measures targeted towards improving the earning capacity of the people and
provision of social safety nets for the extreme poor in Pakistan (Nasim et al., 2009)
Micro credit helps low income people to choose savings, insurance and Micro
franchising. It enables the people to arrange employment for them along with
small scale business. The services provided by micro credit can contribute to the
stream of economic growth and in this way full potential can be gained
automatically in short run as well as long run. Kazim (2010)
9. The poverty alleviation approach followed in Pakistan consists of sustaining a
moderate rate of economic growth with an emphasis on equity in distribution and
human resource development. Different strategies have been adopted for the
purpose, which include special programs and short-term measures targeted towards
improving the earning capacity of the masses in general and provision of social
safety nets for the really poor in Pakistan. Qureshi, M.I. et al. (2012)
SRSP received a grant of PKR 93,990,000/- from KfW through PPAF. The overall
objective of the project is to contribute to improvement of general living conditions
and quality of life indices of the poor in Khyber Pakhtunkhwa. The project aims to
increase access to energy for off grid, rural communities. The objective of the
LEED was to identify poor & marginalized community and assist them technically
and financially in their economic empowerment i.e. better livelihood, employment
& enterprise development & to encourage people to carry out their business
activities in groups for sustainability. SRSP (A.R. 2016),
10. On the demand side, health financing that includes health micro- insurance,
flexible savings and emergency health loans can help the microfinance clients to
access and manage the costs of health care. Furthermore, loans for house
improvement and water, sanitation and hygiene (WASH) or even treated mosquito
nets can drastically improve living conditions, reducing the risks of common
diseases like Malaria, Dengue and Tuberculosis, leading to healthier lives. Saba
Abbas and Saquiba Aziz (2017)
Major roles played by Khushali bank includes
• Making sure the self-sustenance and helping poor fight against poverty.
• Helping women to participate in economic development, Micro Credit also fosters gender
equality and economic wellbeing.
• Credit availability to people to start small businesses, ensuring access to education facilities,
health facilities and employment generation.
• Ensuring the availability of funds to poor who do not have access to formal credit institutions
11. Research Methodology
• Survey Approach
An analysis of the social research methodologies suggests that survey is the handy
tool for managers to collect secondary and primary data using questionnaire,
research estimated data and existing literature about the topic under consideration.
It is noted somewhere that in secondary research, the secondary approach is the
most frequently used mode of reflection because the literature surveys are
reportedly.
• Population and Sample
A population is a collection of all the elements we are studying and about which
we are trying to draw conclusions or the population is the total collection of
elements (students, citizens, players, accountants, universities) about which we
wish to make inference based on sample information The population of the study
consists of all the Khushali banks in Pakistan which include 106 branches. In our
sample we included five branches of Khushali bank situated in D.I.Khan, Bhakkar,
Kohat, Bannu and Peshawar.
12. Research Technique
In study, the structured questionnaire and research estimated data is
used to analyse the efficiency and working of the Khushali Bank in
poverty reduction.
Tools for Data Analysis
The collected data was analyzed through Statistical Package for Social
Sciences (SPSS) to get the precise results under the light of given
objectives.
13. Data Analysis
Table 1 shows that as the female very important segment of the society, they had
got benefits from Micro finance. Khushali Bank limited prefers the women to
provide funds through micro finance as they are more trust worthy and utilize the
loans more properly and in a good way.
Gender Frequency %
Male 35%
Female 70%
Total 100
14. Table 2:
Age wise distribution of sample
respondents
Age group (years) Frequency %
18-25 20%
26-35 60%
36 and above 20%
Total 100
Table 3:
Marital status of sample respondents
Marital status Frequency %
Un married 20%
Married 35%
Widower 22%
Divorced 23%
Total 100
15. Table 4:
Education level of sample
respondents
Education Frequency %
Illiterate 90%
Up primary 6%
Primary pass 4%
Total 100
Table 5:
Occupation of sample respondents
Occupation Frequency %
Farmer 15%
Retailers 20%
Home enterprises 32%
Sewing and
embroidery
40%
Total 100
16. Table 6:
Family size of sample
respondents
Family size Frequency %
Large 45%
Medium 55%
Total 100
Table 7:
Micro credit
Amount (Rs) Frequency %
10,000 15%
20,000 53%
30,000 25%
40,000 13%
Total 100
17. Table 8:
Interest charged
Interest charged Frequency %
20% interest rate 12%
22% interest rate 88%
Total 100
Table 9:
Time to return loan
Time to return loan Frequency %
6 months 0%
12 months 100%
Total 100
18. Table 10:
Processing of loan
Loan processing (days) Frequency %
8 25%
20 69%
30 6%
90 0%
Total 100
Table 11:
Security
Bank Security for
repayment of credit
Frequency %
Yes 0%
No 100%
Total 100
19. Table 12:
Fulfil the basis needs
Fulfilling the basic
needs
Frequency %
Yes 90%
No 10%
Total 100
Table 13:
Quality of children education
Quality of children
education
Frequency %
Yes 81%
No 19%
Total 100
20. Table 14:
Quality of living standard
Quality of living
standard
Frequency %
Yes 79%
No 21%
Total 100
Table 15:
Improvement in income and saving
Improvement in
income and saving
Frequency %
Yes 84%
No 16%
Total 100
21. Table 16:
Debt burden
Debt burden Frequency %
Yes 31%
No 69%
Total 100
Table 17:
Other household items
Other household items Frequency %
Yes 77%
No 23%
Total 100
22. Conclusion
The People mostly come to know about the loan facility through personal sources
so it shows the popularity, effective working and customer satisfaction in regard to
micro credit scheme. As other commercial banks do not offer such a small range of
credit general people are highly attracted towards the micro credit bank. Most of
the customers have taken the loan of Rs. 20,000 which is easily repayable and this
shows that many people belong to low income group. Some Compensation In
interest should be given to those who are old customer of the bank. Almost all the
customers are satisfied with the dealing and operation of the micro credit bank.
The Time period of the loan to return is one year. It is a very moderate and
manageable time period. The bank does not insist upon any special requirements or
conditions for extending credit. It just tries to focus on the nature of the business.
It means that the loan is granted for the business which is considered helpful to
generate profit. Normally 15 days to 20 days are taken to process the loan
application which is a proof of efficiency, coordination and hard work of
management.
23. Total policy holder strength according to data review on 30 June 2017
was 639,852. The active borrowers 587,742 in microfinance program
in Khushhali bank of Pakistan. Women Percentage of poorest clients is
100% in this microfinance play an important role to achieve their goal,
and improve the living standard of the family members or a single
person. In total review of Loan by the Khushhali bank is given to the
deserving customers (in groups) without asking them to pledge any
tangible guarantees. All the members of group give guarantee for one
another, which is convenient for all of them. Thus a lot of time for
giving a tangible guarantee is saved. Independent investment rate is
high which shows the efficiency of micro credit.
24. Recommendations
Although Micro-credit scheme has brought positive changes in reducing the poverty,
yet this scheme has certain flaws and deficiencies in operation which might be
streamlined so as to improve the living standard of the poor people.
Youth Career Counselling Program, Micro credit must be given to the
Young, Energetic and the people in the age group of 20-30 because they can utilize
it more productively.
Educational Program, Free health program, in cooperation with other
organizations supporting traditional education in art and craft, micro credit
programs, which provide the financial support families need to meet educational,
health and livelihood requirements.
25. Advocacy & Campaign Program, The bank should start the programs
or to arrange seminars to update the borrowers about the productive utilization of
credit.
Business development Program, the bank should try to reduce the
interest rate up to 6 to 7 percent instead of 20% just like Prime Minister Youth
business loan scheme.
Let’s Plant & make green Pakistan Program.
Humanitarian & Development Efforts, Improvement of Capacity &
Infrastructure of Education Services.
Research Programs, include students, build relationships with people on
the ground, and create hubs in various locations to facilitate research and
dialogue.