Introduction

There is seen that women are in maturity in all over the world than male and they can play a very
important role in the development of any country. They should participate in the development of
a country. Without the participation of women there is no country that can make development.
Working women contribute to the national income of the country. In society, women are not
given equal rights and status with men. They face many socio- cultural attitudes like limited
opportunities for education, social, and economic rights. Because of these things they cannot
participate in the development of a country.. They are not financially independent and are more
vulnerable member of society. A recent World Bank report (World Bank, 2001) confirms that
societies that discriminate on the basis of gender pay the cost of greater poverty, slower
economic growth, weaker governance, and a lower living standard for all people. It is the need of
the developing country to empower the women so that, they can play their role in the
development of the country. Microfinance is a tool to empower women and through it they can
be able to contribute in the development of their country.
Traditionally, women have been marginalized. They are not financially independent and are more
vulnerable member of society. A recent World Bank report confirms that societies that
discriminate on the basis of gender pay the cost of greater poverty, slower economic growth,
weaker governance, and a lower living standard for all people. At a macro level, it is because 70
present of the worlds poor are women. Yet they have no access to credit and other financial
services. Therefore, microfinance often target women. Microfinance is a tool to empower women
from poor household. So, women can get benefits from microfinance institutions as, many
microfinance institutions target only women, to empower them.

Research problem:
The population of women is more than men and they can contribute a good part in economic way
of a country if they empowered economically. When half of the population is economically
ineffective its mean women are not empowered in health, education, food etc. In this they failed
to bring up their children in a positive way mean if a woman is poor she cannot provide the basic
needs to her children who are not good for their future and also for the future of their country.If
we compare the ratio of women empowerment in economic way between Pakistan and other
countries then we are very behind. Globally the ratio of women practicing microfinance is more

than that of Pakistan. In Pakistan the opportunities for women in taking part their private
business through microfinance are very few. This is not good for the progress of the country in
our country the population of women is more than men so that it is necessary to indulge the
women in economic empowerment through microfinance. Women empowerment through
microfinance contains a lot of good things as we can increase the education ratio, awareness
about the family planning programmes, improve our basic health unit and also make progress
economically. Thus this research focuses on how microfinance empowers women in Pakistan and
how it can contribute to the economic development of families and nations. The focus of
research is to measure the level of economic empowerment of women thorough microfinance.
Microfinance will play a role in their marital status and family size of the women. Microfinance
will directly increase the ownership of women of their

moveable and immoveable household

assets. They can own the workplace to start or expand their business.

Introduction of microfinance
Microfinance is an economic development approach that involves providing financial services,
through institutions, to low-income clients, where the market fails to provide appropriate
services. The services provided by the Microfinance Institutions (MFIs) include credit saving and
insurance services. Many microfinance institutions also provide social intermediation services
such as training and education, organizational support, health and skills in line with their
development objectives. Micro-finance has received a global recognition today not only as a
powerful instrument for poverty reduction and empowerment of women, but also as a promising
sector of financing for the banks, financial organizations and NGOs.
Microfinance is a powerful tool to self-empower the poor people especially women at world
level and especially in developing countries. From early 1970's women movement in number of
countries increasing to alleviate poverty through microfinance programs. The problem of women
less access to credit was given a particular concentration at First International Women
Conference in Mexico in 1975. The evolution of microfinance is from Bangladesh since late
1970s and a very successful project. But in Pakistan, the movement of microfinance sector
started from Agha Khan Rural Support Program (AKRSP) and Orangi Pilot Project (OPP). With
the passage of time microfinance becomes NGO activity and five microfinance banks have been
started under State Bank of Pakistan (SBP) ordinance. Unemployment and economically the low

productivity of the poor are the main reasons of the poverty of poor. Owing to poverty poor
cannot save money and thats why it is difficult for the poor males and females to become selfemployed and to start productive income generating activities.
Women empowerment
Women

make

up

large

proportion

of

microfinance

beneficiaries.

Traditionally, women (especially those in underdeveloped countries) have

been unable to readily participate in economic activities. Microfinance
provides women with the financial backing they need to start business
ventures and actively participate in the economy. It gives them confidence,
improves their status and makes them more active in decision-making, thus
encouraging gender equality (Sarumathi & Mohan, 2011). Microcredit
services lead to women empowerment by positively influencing womens
decision making power at household level and their overall socioeconomic
status. By the end of 2000, microfinance services had reached over 79
million of the poorest of the world. Microcredit has potential to make a
significant

contribution

to

gender

equality

and

promote

sustainable

livelihood and better working condition for women (ILO, 2009).

Women empowerment is one of important issue of present day development
policies in developing countries. Since empowerment is multidimensional
concept, it is determined by many socio economic factors and cultural norms
(Noreen, 2011). According to Chaudary & Nosheen (2009) married women
and women having Islamic view have statistically positive impact on women
empowerment. Hunt and Kasynathan (2002) describes that microcredit
programs for women have positive impact on economic growth by improving
income generating activities. According to Noreen (2011) empowerment
status of rural women in Bahawalpur City can be significantly improved by
increasing their income generating activities by providing loans without any
collateral through different microcredit programs. However, level of women
empowerment is not satisfactory at household level. Age, education of
husband, marital status, and number of sons, father assets and loan amount

are influential factors rather than many other factors. Age effects positively
and more significantly but its variation is not much, among loonies of
Bahawalpur city. Older women are much mobile, have a greater access to
resources and to make decision both inside and outside the home.

Women Are the Poor

It is generally accepted that women are disproportionately represented among the worlds poorest
people. In its 1995 Human Development Report, the UNDP reported that 70 present of the 1.3
billion people living on less than $1 per day are women. According to the World Banks gender
statistics database, women have a higher unemployment rate than men in virtually every country.
In general, women also make up the majority of the lower paid, unorganized informal sector of
most economies. These statistics are used to justify giving priority to increasing womens access
to financial services on the grounds that women are relatively more disadvantaged than men.
Micro and macro level effects of the empowerment of women
If women are empowered then its impact can be at both level like micro and macro. At micro
level if women are empowered economically then will spend money for the welfare of their own
family. They spend on their own health and as a result they born healthy children and then they
spend money for the schooling of their children. They can contribute in the income of their
husband and can raise their own life style that is not easy in the income of their husband. They
can live a luxury life. These are the effect of micro level to empower the women economically.
On macro level they can born a healthy nation that can be play a very important role in the
development of their country. If the young generation of any country is healthy and educated
then there is more chance to the development of that country rather than those countries that have
no healthy nation. It is only possible due to the economic empowerment of the women of that
country.
Pakistan is a developing country
Pakistan is a large country with a population estimated at 130.580 million (Population and
Housing Census of Pakistan 1998). Pakistan is a developing country and according to the World
Bank, population; female (% of total) Pakistan was last measured at 49.19 in 2011. So, it is clear

that women are almost half of the total population. It is sure that if they will not participate
economically then Pakistan could not be developed. And in Pakistan poverty rate is very high as
mention in the World Bank report, 2014 that 60 present population living below poverty line.
They are restricted to participate economically by doing a job or business. It is considered the
responsibility of males to earn and support the whole family. And owing to single income
resource, males cannot fulfil the basic needs of the family properly. So, it is very essential to
support the women economically so that, they can become a part in the development of their
country. So in this sense micro-finance can play a vital role to empower women. NGOs are
playing a very important role to provide them money through micro-finance.
Poverty in Pakistan
The economic difficulties of the 1990s have worsened the poverty problem in Pakistan. The
Asian Development Bank has indicated that the low economic groups are the one bearing the toll
of Pakistans economic problems and subsequent economic reform initiatives of the 1990s
(Country Assistance Plan Pakistan 1999-2001 Asian Development Bank 1998.). Income
poverty reaching the lowest ebb of 20 present in 1990 has risen to 30 present once again in 1995.
Economic Survey 1997- 98 of Government of Pakistan also acknowledges that the problem of
poverty has been intensified in Pakistan since early 1990. World Bank estimates show that about
a third of the population of Pakistan is living below the poverty line in 1990-91. (World Bank ,
1997) This proportion translated into numbers shows that almost 43.5 million people in Pakistan
are living under the poverty line. Hence the problem of poverty, coupled with faltering economic
growth, is turning the existing very bad situation into even worse. Country profile of Pakistan
shows that initially Government subsidized farmer in 1970s, while first microcredit NGO, Agha
Khan Rural Support Program and Orangi Pilot Project (OPP) started giving small loans in 1982.
Furthermore, National Rural Support Program (NRSP) started in 1992 and Network Leasing in
1994. KASHF started in 1997. While, in 2000 Khushhali Bank started working to provide small
loans. Most importantly first microfinance bank came into being in 2002. Microfinance in
Pakistan is a young emerging industry with only a small fraction of the market, less than 8%
people having access to these microfinance institutions. The microcredit sector in Pakistan
consists of MFI, bank and NGOs (Kashaf Foundation, 2011).

Sociological significance:
Sen (1998) says that, whether you global or not, whether you private or nationalize unless
effectively mainstream 50 per cent of your force comprising women, you will not get anywhere.
The division of labour between men and women is clear-cut in the family albeit; the nature of
division may vary from society to society. In a traditional society women usually play a fiddle.
Mostly, it is the man who structures all the decision regarding her. Hardly enjoying equal status
with man, she lives her whole life tuning herself to familial and society priorities fixed for her.
Choices for need fulfilment, opportunities for education economic and social freedom or all
concentrated in a single person (male), which produces a negative effect on status of the woman.
This situation generates ill effects on the lives of the women as well as for the society. For
example divorce, illiteracy, suicide, maternal and infant mortality, poverty, family violence,
immortality and underdevelopment may have strong relationship with the dis-empowerment of
women.
To save half of the human population, effort are being made throughout the world to decrees the
victims of women. Similarly microfinance is also an approach recently formulated for the
empowerment of the women. The main assumption is that by utilizing microfinance a woman
could become economical independent, and occupying some valuable assets, she make at
empowerment. Their empowerment has significant relationship with their vulnerability and
uplifting of the society overall. The present study is also an attempt to find out the relationship of
microfinance and womens empowerment if any, and has its own sociological significance.
The family situation is considered to be very important and the women forms an integral part of
its, thus the study focuses on an influential and critical segment of the population. Since little
research has been conducted specifically on womans empowerment this research will help, fill
the gap about the knowledge of womens empowerment.
recommendations for policy makers from sociological evidence

The study will derive practical

.
Research objectives:

To investigate the economic empowerment of women through microfinance.

To study the changes in the lives of female microfinance clients.

Research questions:

How microfinance effect women economically?

What are the economic conditions of women who are involved in microfinance activities?

Outline of Chapters
This thesis is organized into five chapters. Chapter two reviews the literature relevant to this
research. Chapter three looks at the methodological framework and the data collection methods
used. Chapter four analyses the data collected during the fieldwork and Chapter five concludes
the research and also suggests the agenda for future research in the area of microfinance.
Chapter two provides the review of literature on microfinance. After conceptualizing the term
microfinance in broader terms, the chapter argues that how and when the concept of
microfinance originated. In this chapter, the theoretical and functional differences between
microcredit and microfinance are discussed. Global institutions played a magnificent role in the
development of microfinance services. Microfinance is a development tool to eliminate the
gender difference. It is an important tool for empowerment of women and poverty reduction and
is removing the hurdles in the way to development. There are two types of impacts of
microfinance, its direct impact is on financial services but indirectly it also has social impacts. In
Pakistan, microfinance started from 1970 when the Government took initializes to facilitate the
small farmers though loans.
Chapter three looks at the methodological considerations and the data collection methods
employed in this research. The research design that includes data source and sampling strategy,
use of questionnaires as a tool of data collection, the scheme for entering fieldwork sites and
conducting research, and techniques used for transcribing and analyzing data are discussed. The
chapter also includes the ethical considerations of the research and the fieldwork experiences of
the researchers.

Chapter four analyzes the data. The chapter shows the pictorial overview of basic demographics
of the respondents i.e. gender distribution, division of repeaters and non-repeaters, family
members and overview of marital status of the respondents