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Micro Finance Case Study

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S (2005) Micro finance is a form of financial development that has primarily focused on alleviating poverty and improving the living standard by providing financial services to the poor.
Haroon and Jamal (2008) Most people think of micro finance as Micro Credit i.e. lending small amounts of money to the poor. Micro finance is not only Micro Credit, but it also has a broader perspective which includes insurance, transactional services and savings.
When a person earn less than two dollar per day he will be considered poor or if a person income not sufficient to fulfill foodstuff for healthy and productive life is called poor. (Baar, 2005).
All the programs in Pakistan that become a cause of poverty reduction. He observed that various organizations
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Majority of population in India is lying below the poverty line so due to this majority of population microfinance have a market in India. According to him to control the poverty growth rate 20% should be continuing. The demand of microfinance increasing day by day in India that required 42000 crores in coming five years but now the outstanding available balance is Rs. 1600 crores (Kumar et al, 2010).
In the country where poor people income not sufficient to fulfill the basic needs including provision of foods or nutrition, slack of health and medication facility, lack of better education facility, lack of sanitation system and poor household conditions such country is called third world country (Adewole, 2008).
Growth, stability, survival and increasing in income all these objectives can be achieved through the various financial services that are offered by the microfinance institutions. To prove this a data have been collected from Bangladesh, Sri Lanka, Indonesia and used counter factual approach to find out the impact of microfinance on poverty. He observed positive impact of microfinance on poverty through the study in all countries from where he collected data (Hulme & Mosley,
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Primary and secondary data was used and 68 households were interviewed. The multiple regression analysis was used. The results showed that micro-credit improves income.
Micro-credit initiatives resulted in better output as far as poor people and women in particular are concerned. The micro-credit provide a paradigm shift in microfinance and contributed in defeating the notion of poor risk and not creditworthy when it is concerned about poor community. Various studies reported that most borrowers focus on marginal gains, whereas, very small ratio results in reasonable and sustained rise in income. The poorest borrowers get less gain when compare them with middle and upper category of poor. Moreover, 10-15% of the population is not included in micro-credit schemes (MacIsaac, 1997).
Morduch (2002) studied the impact of microfinance on poverty reduction using micro-credit, assets, family size, education as independent variables and income of household as dependent variable. The study used Consultative Group to Assist the Poorest (CGAP) poverty assessment tool. Housing Index, SEF s Participatory wealth rankings, US Aid s AIMS tools for assessment purpose. Evidence showed the positive impact of microfinance on poverty
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