Over-Indebtedness of Rural Micro-credit Financing in Bahawalpur: An Impediment to their Social & Financial Mobility

Abstract

The purpose of this study is to investigate the impact of micro-credit finance on over-indebtedness and social & financial mobility of micro-credit finance participants. The objectives of this research is to investigate that micro-credit finance participation leads to over-indebtedness of micro-credit finance and over-indebtedness of micro-credit finance effect the social and financial mobility of micro-credit finance participants. The study also investigates the role of women participation in those financial decisions through which over-indebtedness exist. The study is quantitative and the research design is explanatory in nature. The data was collected from 266 current and ex-micro-credit finance participants through questionnaire and interview were also conducted in order to facilitate respondents. The data was analyzed through different statistical software I.e. Microsoft Excel and SPSS. The findings of the study indicate that micro-credit finance participants experience over-indebtedness by participation in micro-credit finance program but it does not affect the social and financial mobility of micro-credit finance participants. It also evaluate that women involvement has weak mediating relation with over-indebtedness and financial mobility. This study has important implications because it provides insights regarding over-indebtedness of micro-credit finance participants that effects their social & financial mobility. This study also helps policy makers in formulating new regulations in the area of micro-credit finance sector in Pakistan. The new policies may target the aspect of over-indebtedness among micro-credit participants in future.

Keywords

• micro-credit finance, poverty, addiction, over-indebtedness, women empowerment, social and financial mobility.