Can Commercially-Oriented Microfinance Help Meet the Millennium Development Goals? Evidence from Pakistan

Posted: 9 Aug 2011

See all articles by Heather Montgomery

Heather Montgomery

International Christian University (ICU)

John Weiss

Asian Development Bank Institute

Date Written: January 1, 2011

Abstract

The current emphasis in the microfinance industry is a shift from donor-funded to commercially sustainable operations. This article evaluates the impact of access to microloans from the Khushhali Bank — Pakistan’s first and largest microfinance bank which operates on commercial principles. Using primary data from a detailed household survey of nearly 3,000 borrower and non-borrower households, a difference in difference approach is used to test for the impact of access to loans. Once the results are disaggregated between rural and urban areas there is a positive impact in rural areas on food expenditure and on some social indicators such as the health of children and female empowerment. These impacts are observed even in very poor households. These findings suggest that commercially-oriented microfinance and the millennium development goals are not incompatible, given a supportive environment.

Keywords: Asia, Pakistan, microfinance, poverty, impact, empowerment, Millennium Development Goals

JEL Classification: G21, O16

Suggested Citation

Montgomery, Heather Anne and Weiss, John, Can Commercially-Oriented Microfinance Help Meet the Millennium Development Goals? Evidence from Pakistan (January 1, 2011). World Development, Vol. 39, No. 1, 2011, Available at SSRN: https://ssrn.com/abstract=1905497

Heather Anne Montgomery (Contact Author)

International Christian University (ICU) ( email )

Osawa 3-10-2
Mitaka-shi
Tokyo, Mitaka-shi 181-8585
Japan

HOME PAGE: http://www.icu.ac.jp/index_e.html

John Weiss

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F 3-2-5
Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

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