Rural Microfinance in Pakistan: Transition in Women’s Preferences and Priorities

Abstract

The study demonstrates a shift in the borrowers’ preferences and priorities as the microfinance strategies transition from group to individual-based, and as a result, a trend away from poverty lending toward financial system approaches. The study's findings show that, on the whole, microfinance providers (MFPs) have fully adopted the self-sustainability paradigm and are rapidly shifting their focus to individual lending. However, the MFPs that offer interest-free loans, employing a group-based lending approach have not been impacted by this. Women were mostly unable to start enterprise or a business with the loan amounts; they were involved in the social exchange through the proxy loans as most of the loans were used for construction or repair work, or as a stop-gap arrangement by the family. While the study does not provide conclusive evidence to gauge borrowers’ preference favouring a particular mode, it however makes a case for further research to see it beyond the confines of the economic empowerment. The findings are based on a year-long ethnographic research with the in-depth interviews with 45 women and five men borrowers of the three microfinance providers in a Potohar village of district Chakwal in Pakistan.