The impact of microcredit and personal empowerment on women borrower’s quality of life in Pakistan

Improving the quality life of the marginalized poor women is one of the major development issues in Pakistan. In this regard, the microcredit program seems to provide a practical solution to improve their quality of life. Nevertheless, owing to many socio-cultural factors that limit their personal empowerment and accessibility to microcredit, the effectiveness of microcredit in improving their quality of life is an issue. The study therefore, aims to estimate the impact of microcredit and personal empowerment on the quality of life of women in Pakistan. Towards this end, primary data has been gathered by using a survey questionnaire. A stratified random sampling technique has been used to collect data from 400 women borrowers in Bahawalpur, Pakistan, who has taken microcredit from three major microcredit institutions - Khushhali Bank Limited, Tameer Microfinance Bank and National Rural Support Program Bank. The data analysis has been carried out using the Multinomial Logit Model. The findings of the
study shows that microcredit which is measured by loan duration, loan size and training, is found to be significant in explaining the quality life of the women borrowers. Interestingly, personal empowerment is also found to have a significant relationship with quality of life. Furthermore, the economic decision making domain of personal empowerment is also found to be significant in explaining the quality life of the women borrowers. The study concludes that the effort to improve the quality of life of women in Pakistan should not be focused just on the accessibility of credit to them. It must come simultaneously with advancing their personal empowerment. This can be done through improving their economic decision- making ability such as improvement in the level of education, ability to move freely and reducing the sociocultural-political barriers that hinder them from realizing their full potential of personal empowerment.