Utilization of Microfinance Loans and Economic Empowerment of Women Entrepreneurs: Evidence from Southern Punjab, Pakistan

Abstract

 Microfinance institutions play a significant role not only to overcome the poverty but also to accelerate the women empowerment. It provides the financial and non-financial services to the poor people. Majority of these programme target women because they have very limited access to credit and have insignificant share of power in household decision-making. The objectives of this study were to examine the utilization of microfinance loans by women entrepreneurs and to analyze its impact on their socio-economic lives. The study was conducted in four (4) districts of Southern Punjab; Multan, Muzafar Garh, Khanewal and Bahawalpur. This study consisted of 500 women entrepreneurs who had received loans from microfinance institutions. Multi-stage sampling technique with area cluster sampling was applied in this study and structured Interview schedule was used as a tool for data collection by visiting microfinance institutes from where they were taking loans. The collected data were analyzed through descriptive and inferential statistics. The study results showed that (96%) of the respondents had improved their business after receiving microfinance loans, (49%) of the respondents indicated that their decision-making ability improved. Grater part of the respondents (51%) expressed that their domestic violence decrease after utilizing microfinance loans. A significant proportion of the respondents (59%) and (53%) reported that their assets and income increased respectively. Hypothesis results showed that the training related to microfinance, awareness programs and access to microfinance loans had a significantly positive effect on the empowerment of women entrepreneurs, while negative relationship of challenges to avail loan has been observed. The study revealed that microfinance overall have a positive impact on socio-economic and personal lives of women entrepreneurs. It showed that microfinance not only empowered women but also contributed to overall well-being of the society. The findings emphasize the importance of policy interventions by both the government and non-government organization to enhance the women’s access to credit and to provide training programme that ensure effective utilization of microfinance loans.