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Role Of Microfinance In Entrepreneurial Development In Low-Income Areas

Author

Listed:
  • Saif ULLAH

    (ZUFESTM, Ziauddin University Karachi, Pakistan)

  • Mirza Raza ALI

    (Institute of Business Management (IoBM), Karachi, Pakistan)

  • Shehla Najeeb SIDIKI

    (Ziauddin University Karachi, Pakistan)

Abstract

This study examines microfinance's role in developing entrepreneurship in low-income areas. Entrepreneurship is one of the better ways to eradicate the most critical problems, such as poverty, income inequality, and unemployment. The study uses a paired sample t-test on 200 small entrepreneurs from low-income areas to investigate the difference between before and after availing of a microfinance facility. Furthermore, the microfinance gap is calculated by taking feedback from entrepreneurs before and after getting the financing facility. The microfinance gap is employed to examine whether microfinance plays a role in developing entrepreneurial skills. The results show that the microfinance gap positively contributed to entrepreneurial development. The microfinance facility has proved to be a technique for entrepreneurial development for poor and young unemployed youth. MFIs are considered the best tool to reduce poverty and unemployment and increase entrepreneurial development.

Suggested Citation

  • Saif ULLAH & Mirza Raza ALI & Shehla Najeeb SIDIKI, 2024. "Role Of Microfinance In Entrepreneurial Development In Low-Income Areas," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(3), pages 272-290, December.
    • Handle: RePEc:blg:journl:v:19:y:2024:i:3:p:272-290
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    References listed on IDEAS

    as
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    4. Joana Silva Afonso & Joe Cox & Andy Thorpe, 2020. "Business Performance and Heterogeneity among Islamic Microfinance Clients: Evidence from Pakistan," Working Papers in Economics & Finance 2020-03, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
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