Social Impact Assessment of Microfinance Programmes - weman

Table – 9.1
Average Amount of Loan
Microfinance Institution
Loans Taken
OCT SAFWCO Akhuwat Asasah Kashf NRSP UPAP
One 10000 7500 10000 12000 10000 10000 10000
Two 15000 10000 12000 18000 14000 15000 10000
Three 15000 15000 13500 20000 18000 20000 13000
Four 25000 18000 15000 20000 24000 25000 13000
Five 30000 20000 25000 30000 13000
Six 40000 27500 30000 14000
Seven 28000 35000
Thirdly, with the exception of only one MFI, all the MFIs state that they are in the
business of poverty alleviation. In their Mission and Vision statements, they all state that
their microfinance (and in the case of one MFI, its development-related interventions) are
all for the poor and that their clientele is also from the ‘poor’. The problem then, is
around the definition of the notion of ‘the poor’. As we found in our Institutional
Reviews of each MFI, all MFIs carry out some sort of in-house ‘poverty assessment test’,
where they identify localities and people whom they consider to be ‘poor’. By this
criteria they may actually be targeting those whom they call the ‘poor’. However, if an
objective criterion for poverty is used, such as the Government of Pakistan Official
Poverty Line – Rs 1,000 per capita – then, very few clients can officially be called ‘poor’.
Our results show that only 23 percent of urban Borrowers – 65 percent of our sample –
are below the Official Poverty Line (OPL). On the other hand, 50 percent of the Non-
Agricultural Rural Borrowers and 61 percent of the Agricultural Borrowers, are below
the Official Poverty Line. Clearly, by the criterion of the Official Poverty Line, the
clients selected by urban-based MFIs suggests, belong to the ‘non-poor’. However, one
needs to make a few important points regarding poverty-line criteria.
The OPL figure of Rs 1,000 per capita is a controversial statistics and many economists
feel that the amount is too low, and a poverty line ought be drawn at a somewhat higher
level. If this is the case, then the proportion below the poverty line for all MFIs would
rise, depending on what alternative minimum level was chosen. If one used the poverty
line of the US one Dollar-a-Day criterion, the proportion below the poverty line targeted
by the MFIs can rise considerably. Secondly, MFIs are not meant to carry out household
poverty studies and do not know what the OPL is, and nor how one measures it.
Moreover, one questions why any MFI ought to stick to the OPL criterion, when they are
carrying out the provision of microfinance based on their own criteria of who the ‘poor’
are. Thirdly, most studies on microfinance interventions across the world have shown,
that the poor are often by-passed, ignored or over-looked, and the clients of many wellknown
MFIs, are above the poverty line. The reasons for this are understandable and it
seems that most MFIs in Pakistan follow their own criteria. It is unlikely that one will see
much change in this pattern. Moreover, perhaps it is also inadvisable to suggest that all
MFIs follow the strict OPL criterion.
4