Poverty alleviation is always the top priority for any government of any country especially on developing countries where access to money market for any poor people is very hard. Government policys play very important to fight againt the poverty vigoursly after the restoration of democracy.
There are number of issues which cause social problem but some of them are:
- High number of population growth especially in developing countries like Pakistan, India.
- Illeteracy / poor education
- Proverty / poor people / low income
- Igonance by government/ leadership
- Lack of transparency and corruption
Microfinance is a new hope or way to overcome and fight with poverty and to improve living standards especially on women and children Health, Education, nutrition and other social services.
Although the exact location and date of the first microfinance effort has yet to be determined, scholars attribute the modern microcredit movement to the work of the Grameen Bank and Accion International. Both organizations developed independently of one another, but share a number of common characteristics. The Grameen Bank was founded by Muhammad Yunus in the early 1970s in Bangladesh (Jolis, 1996). At the time, traditional banks were not interested in loaning money to poor people, who were considered poor repayment risks. Yunus' first loan consisted of $27 of his own money, which he lent to 42 individuals. Consequently, he discovered that very small loans could make a significant difference in a poor person's ability to survive, and the Grameen Bank was founded. Over the last thirty years, the Grameen Bank has issued more than $5 billion in loans to several million borrowers - at the close of 2005 the number of outstanding loans totals more than 4 million. To ensure repayment, the bank uses a system of "solidarity groups": small informal groups, nearly all of them exclusively female, that meet weekly in their villages to conduct business with representatives of the bank, and who support one another's efforts at economic self-advancement. As it has grown, the Grameen Bank has also developed other systems of alternate credit that serve the poor.
Institution offering microfinance in Pakistan:
- ADBP (Agricultural Development Bank of Pakistan)
- AKRSP (Aga Khan Rural Support Programme)
- Baluchistan Rural Suport Programme
- BUSTI (Basic Urban Services for Kacchi Abdies)
- Central Directorate of National Savings
- Fellowship of the Least Coin
- Orangi Pilot Project
- Sindh Rural Workers Cooperative Organization
- SRSC (Sarhad Rural Support Corporation)
In my dissertation i would like to undertake first two institutions ADBP (Agricultural Development Bank of Pakistan) and AKRSP (Aga Khan Rural Support Programme).
History of ADBP:
In early 70's agriculture development bank of Pakistan (ADBP) later named as Zarai Taraqiati Bank limited (ZTBL) was established to provide confident finance and services to small farmers and low income holder to strength the rural and agricultural sector and to reduce poverty and improvement of living standard. But from last one decade outreach and financial performance of the institution not really good and therefore currently on restructuring process.
In early 80's the AKRSP later graduated as first micro finance bank (FMFB) and the orangi pilot project (OPP) were come out with a social objective to reduce poverty by giving decent funds or finance to the poor. AKRSP has been working for poor and rural areas of northern side of Pakistan which is located among highest mountains of the world. The area shares it border with Afghanistan, china and india. The population of over one million lives in small villages widely dispersed throughout an area covering almost 90000 square kilometer.
The goal of the AKRSP is to improve the socio-economic conditions of northern side of Pakistani people by helping through providing microcredit and social services as part of their alleviation of rural poverty.
Whereas, the OPP provided financial help to urban poor of Karachi. Besides these institutions, specialized and multipurpose microfinance institutions and non govenement organizations also working in microfinance services to help poor segment of the population with missionary objective.