Is Credit Enough? Entrepreneurial training through MFIs in Pakistan: A case study
Keywords:
Micro financing, micro financial institutions, trainings to entrepreneurs, entrepreneurial development, analytical hierarchical processAbstract
The academic and development policies mostly discuss credit constraints faced by micro-entrepreneurs and presume entrepreneurs would be managing their business optimally. However, credit alone is not an answer to the needs of an entrepreneur. There is a need for understanding how to utilize the funds properly to have a successful venture. Microfinance providers are working in coordination with other non-financial services to cater to these needs for the entrepreneurs for entrepreneurship development and societal up lifting. Pakistan in the case has a sound microfinance structure but the outreach seems to be much lower than other peer nations in the world. The present study aims to explore the microfinance industry in Pakistan and their credit plus approach targeting enterprise development in particular. The study follows a qualitative approach which induces the possibilities of providing training to the clients, particularly entrepreneurs. Three main financial institutions of Pakistan are taken as a sample for the understanding of MFIs and their perception towards entrepreneurs through interviews as the main tool. The results revealed that no Microfinance bank provide any sort of formalized pieces of training to the entrepreneurs or MESE loan clients, although they wish or intend to do so. However, non-banking Microfinance institutions despite smaller loans and short span provide extensive training to their borrowers. The study has main policy recommendations that may be adopted by the MFIS or Central bank of the country to support the inception stage of entrepreneurial development in Pakistan.
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