Analysis of issues on micro credit - the case of two villages in Punjab
Seemi Waheed
Pakistan Development Review 40(4(2)): 723-750
2001
ISSN/ISBN: 0030-9729 Document Number: 247796
This paper analyses the micro-credit scheme of the Punjab Rural Support Programme (PRSP) in Pakistan in terms of extent of targeting the poor, types of loans given to the target client, and impact of one-time micro-credit on the incomes of the poor. For this purpose a survey was undertaken in the villages of Ladheki Nevian and Pandoki. The operational cost of credit disbursement is also analysed to determine the self-sustainability and outreach of the programme. Results suggest that the micro-credit scheme is not properly targeted to the poor and has a limited coverage. Despite the high cost of the programme, collusion among members of community organizations and exclusion of other castes, the communities find micro-credit useful compared to loans from other sources because of lower interest rate and ease of procedures. PRSP's impact in terms of improvement in income is confirmed. However, there are some caveats. PRSP is focusing on regions where achieving desired results is easier. Therefore, PRSP should focus on regions that are a bit riskier.