ANALYSIS OF CRITICAL FACTORS OF MICROFINANCE

This article is about the performance of Microfinance Institutions – MFIs of Pakistan. In this article the types of MFIs operating is Pakistan is discussed with their details i.e. Microfinance Banks, Rural Support Programs and NGOs. Some other organizations are also involved in micro financing but their percentage is very low. It is found that Rural Support Programs RSPs are not totally involved in microfinance but have a large chunk of funds for microfinance. Micro loans are given for various purposes including starting a new business. The real theme of microcredit is to give money to a poor person to start a small or micro business and increase his family income but micro loans are often used for many other purposes such as paying another expensive loan, paying for medical expenses of bread earner of the family, marriages, construction etc. In this research work the researcher has tried to analyze the performance of MFIs of Pakistan and to find out those factors which contribute in their effectiveness. Two approaches of microfinance i.e