POVERTY ALLEVIATION THROUGH MICRO-CREDIT

Abstract: Micro-credit is known as an effective tool for poverty alleviation. In poor countries like Pakistan greater attention has been paid to poverty alleviation through micro-credit, especially in the last decade. The successful use of the micro-credit is considered as a victory for the disadvantaged segments. Considering the poverty alleviating impact of micro-credit, currently many micro-credit institutions are working throughout the developing world. Still there is a myth prevailing regarding the effectiveness of micro-credit for poverty alleviation. Therefore, this paper is an attempt to analyze the role of micro-credit in poverty alleviation. Before and after comparison was incorporated to evaluate the poverty alleviation through micro-credit by using some indicators i.e. monthly household income, monthly household savings and economic status before and after utilization of the credit. To achieve the desired objectives of the study 80 micro-credit beneficiaries were interviewed in four urban slums of Rawalpindi/Islamabad (Pakistan). There has been found a significant association between economic status of the micro-credit beneficiaries (after the utilization of the credit) and beneficiaries ’ age, total number of family members and monthly household income (after the credit utilization)