Microfinance Challenges and Opportunities in Pakistan

Abstract

The purpose of the paper is to highlight the challenges and opportunities face microfinance sector in Pakistan. Micro finance sector in Pakistan is coming to the end of its primary stage and is now in a position to take off towards significant growth. However, the successful transition is subject to strategic thinking by Micro Finance Providers (MFP). Numerous challenges are ahead of this sector like improper regulations, increasing competition, innovative and diversified products, profitability, stability, limited management capacity of micro finance institutions (MFIs) etc. On the other hand, the rapid increase in poverty in Pakistan, along with other opportunities, is paving way for the growth of this sector and offering a huge market potential for microfinance. On this basis the sector presents a lot of opportunities such as: stimulating growth of economy, women empowerment, increasing volume, accessibility and outreach, economics of scope etc.