Factors Affecting on Expansion of the Microfinance Industry in Pakistan

Muhammad  Azam; Haseeb  Ahmad; Junaid Sadeeque; Uzma  Haroon

doi:10.69565/jems.v3i1.316

Authors

Muhammad Azam (Ph. D Scholar) Business Administration, NCBA & E, Sub Campus Multan, Associate Professor, Govt. Alamdar Hussain Islamia Graduate College, Multan, Pakistan.
Haseeb Ahmad (Ph. D Scholar) Business Administration, NCBA & E, Sub Campus Multan, Lecturer University of Education Lahore, Multan Campus.
Junaid Sadeeque (Ph. D Scholar) Business Administration, NCBA & E, Sub Campus Multan, Branch Manager, National Bank of Pakistan, Industrial Estate, Multan
Uzma Haroon HOD, Business Administration, NCBA & E, Sub Campus, Multan, Pakistan

DOI:

https://doi.org/10.69565/jems.v3i1.316

Keywords:

Factors effecting, Microfinance, Pakistan, Banking sector

Abstract

The main objective of the study is to explore the factors that affect the microfinance industry expansion in Pakistan. To attain the objective of the study we collected the data from the microfinance industry from 2010-2020. Our results show that there is a negative relationship between the previous year's log of the gross loan portfolio and the current year's log of the gross loan portfolio. There is a positive relationship between the loan amount disbursed and the log of the gross loan portfolio. The probability value of the log of loan amount disbursed is 0.2518 which is statistically insignificant. There is a negative relationship between the previous year's log of loan amount disbursed and the current year log of gross loan portfolio There is a positive relationship between the log of several active borrowers and the gross loan portfolio. There is a positive relationship between the previous year’s log of the number of active borrowers and the current year's log of gross loan portfolio. Microfinance is a sort of banking service that is provided to unemployed or low-income persons, and clusters who or else have no other right to use economic services Eventually, microfinance aims to provide low-income groups and circumstances become sovereign by providing a method to save money, the sponge money and obtain insurance.