The Impact of Microfinance on Living Standard of Households: Evidence from Districts Zhob & Sherani

Abstract

The majority of Balochistan's population lives in rural areas. One of the primary goals of rural development interventions is to increase per capita earnings in order to improve community living conditions. According to multidimensional poverty index in Pakistan, almost 39 percent of population suffers from multi-dimensional poverty, with the uppermost rates of poverty in province of Balochistan. BRSP has assisted the poor and contributed to the improvement of living conditions and the abolition of poverty. There is some evidence that these activities and services have contributed to the progress of living standards as a result of the rise and strength of community groups. However, more research is required to determine the precise nature of the BRSP's influence on boosting the living conditions of households in the Balochistan districts of Zhob and Sherani. This study examines the impact of microfinance on household living standards using data from the districts of Zhob and Sherani. To attain study objectives, quantitative methodologies are used in conjunction with research goals. To evaluate the study hypothesis, statistical analysis is performed on BRSP secondary data. The estimation is based on Madala's (1983) and Green's (2003) Treatment Effect Model (TEM) through consumption. Findings of the study revealed that the hypothesis are accepted and concluded that family income, family size, system, education are leading towards the achievement of consumption. The findings of study recommend that microfinance institution should focus on income-oriented financing to meet financial needs of the borrowers in the area. Study also suggests that microfinance institutions must grow their operations in remote areas of the districts.