Customer Behavioral Approach for using Micro-Credit: Analysis of Rural Community of Pakistan

Abstract

Micro financing has become integrated in the financial system of Pakistan for overcoming increasing level of poverty. Approach of micro-credit by which small loan is landed to lower income people play a great role in enhancing poor ones income. This study investigates the level of benefits like encouragement for financial independence, mobilization and allocation of resources, female‟s control over resources, smooth cash flows, and decision making at family level due to micro-credit. The result should assist the micro finance institutions (MFIs) to ascertain whether micro-credit financial system is working properly. A survey of MFIs clients (Male and female) shows behavioral intentions and effects of micro-credit to fulfill their planned purposes of borrowings. Respondent‟s attributes the increase, to their standard of living, to micro-credit and MFIs efforts. Thus, this study indicates the planned used by micro-credit and minimal level of use of micro-credit for no planned purposes. It had been practically amplify that the increase in scope of micro-credit is necessary for poverty alleviation in Pakistan.