An Empirical Study on the Impact of Micro-Credit Financing on the Socio-Economic Status of Small Agriculturists in Pakistan

This study empirically studies the impacts of micro-credit finance on the socio-economic status of small agriculturists in Pakistan. Little research has been conducted in this area in Pakistan. The data was gathered from 693 micro-credit finance participants and non-participants, at a 2 to 3 ratio, through an adapted questionnaire from the 8-clusters out of 12 clusters of 36 districts of Punjab using the cluster sampling technique. A survey was organized to perform the investigation in which two close-ended structured questionnaires were developed to collect data from the small agriculturists who owned less than twelve and a half acres of land. Both descriptive and inferential statistics were used to analyze the results of the study. Various statistical tests, such as EFA, SEM, KMO, ANOVA tests, etc., were used to test the expected hypothesis of the study and to confirm the affinity among variables. This research revealed that micro-credit finance has performed a positive role in developing the socio-economic status of small agriculturists after obtaining the micro-credit finance. The study indicated that micro-credit finance has played a significant role in changing and developing the socio-economic status of the respondents. Participation of small agriculturists enables the poor masses of rural areas to eradicate poverty in rural areas to enhance their living standards and to strengthen their financial conditions. The end results of the study revealed that most small agriculturists were taking benefits from micro-credit lending schemes. They also improved their socio-economic status and mitigated poverty. The findings of the study provide profound insight and should be helpful to regulators, policy makers, managers, microfinance institutions, government authorities, and all other stakeholders.