Posted on June 25, 2009 - by Gavin
Micro-finance can boost labour class income…
The Nation
KARACHI – The success of micro-finance institutions around the globe has established that it could make an important contribution in improving the socio-economic conditions of the poor. All stakeholders of micro-finance industry in the country need to realise that micro-finance is but one element of a
comprehensive strategy to combat poverty.
Interventions based on this can indeed lead to poverty alleviation, at macro scale, reports SBP publication, Towards Achieving Social and Financial Sustainability: A study on the performance of micro-finance in Pakistan.
The survey results revealed that the availability of loan had a partial impact to reduce the incidence of child labour.Though respondents expressed rise in their income levels as a result of availing the loan but it alone did not serve as a universal remedy to fully convince parents to take their children out of
work.
Despite a limited impact the data also indicates that in certain cases micro-finance interventions did lead to improvement in the clients’ socio-economic condition by enabling them to take their
children out of work and put them into school.
As many as 62.9 percent of parents indicated that an increase in family income helped them send their children to school and 62.3 percent said it helped them withdraw their children from work and
send them to school.
Most of the respondents reported a positive relation between income generated through micro credit interventions and child’s school education. However this is not always the case unless financial measures are supported by additional services like free non-formal/formal education for children, provision of free
health services and extensive social mobilisation of the families against child labour. Thus it is difficult to infer that micro finance interventions alone can enable families to reject child
labour and send their children to school, asserts the report.
Responding to the positive initiatives of government and the central bank, micro-finance industry has grown at a significant pace. However, it is able to cater to only 4 percent of the
potential market. Both at the government and private level, there is a need to increase participation to reach out to the 25 to 30 million potential clients of micro-finance.
The report genuinely believes, “like other social impacts of micro-finance, women empowerment cannot be quantified, however an increase in number of female clients can be an indicator of
rising awareness among female clients.”
It is to be noted that according to the field officers,especially of unregulated sector, women are better clients as compared to their male counterparts. This observation is consistent with the anecdotal argument of women being betterclients with reference to recovery of loans.
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