FACTORS AFFECTING THE GROWTH OF ISLAMIC MICROFINANCE INSTITUTIONS IN PAKISTAN
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Date
2017-05
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Publisher
UMT.Lahore
Abstract
Pakistan is an under develop economy having a population of about 200 million. It is the
six most populous country of the world with high level of poverty. The Government and
social sector organizations are using many tools to alleviate poverty. However, despite
many attempts have been done for the basic necessities of human, it is still growing in
Pakistan rapidly. Micro Finance considered being the globally accepted as an important
tool to alleviate poverty. Pakistan officially declared Islamic Republic of Pakistan has
great potential of Islamic micro financing. This research study aimed to study and
identify the factors that impact on the growth of Islamic microfinance sector in Pakistan.
A questionnaire is employed to achieve the research objectives of the study. The data is
collected from 60 high ranked individuals having number of years‟ experience in the
Islamic micro finance industry of Pakistan. One sample t-test and regression model is
applied to examine the determinants of Islamic micro financing sector growth in
Pakistan. The findings of the study revealed that structural issues of Islamic micro
finance institutions, availability of Shariah complaint funds, availability of Islamic micro
finance products, non-entrepreneurial approach of community, lack of regulatory and
policy framework are the main problem areas hampering the growth of IMFIs in
Pakistan.