An economic assessment of micro-credit (ADBP) to raise the income of rural poor of district Sheikhupura [Pakistan]

The study, was conducted in the three villages of district Sheikhupura by collecting data through interviews. The occupational distribution of sample barbers, carpenters and tailors constituted 40% 18.33% and 41.66% respectively. Most of the villages had Pacca drains and houses, electricity and drinking water facilities. Unemployment was high. There were three basic health units, three schools and a post office but there was no college or vocational training centre. Farmer and non farmer families constituted 68.35 and 31.65 % and males dominated the females. In barbers category males:females ratio was 59.85 : 40.14%, in carpenters 54.02 : 45.97 % and in tailors 58.87 : 41.12 %. The respondents were classified in to two groups i.e. respondents below forty years of age were categorized as young while above forty were considered as old. In barbers 75% were and 25 % old, in carpenters 36% young and 64% old and tailor 60% young and 40% old. On overall 64.82% were illiterate. 20.75% had education up to primary level, 9.5% to middle and 5 % up to matric level. 81.63% were fully employed and 18.67% were partially employed. The barbers earned 48% of their income from haircutting, 27% form shaves, 13% from cooking and 12% from other sources. The carpenters earned 53.39% income from production of new implements, 19.75 from repair of implements, 16.8 from repair of woodwork and 10.16 from other sources. The tailors on average earned 61.61 % from sewing new clothes, 20.50% from stitching the old clothes and 17.88% from others. Average capital requirement of barbers was Rs: 7520, carpenters 10454 and tailors Rs. 4800. The average credit requirement of all the respondents were 7591 per year. Expected increase in income as the percent of credit was 10.63% by the barbers, 4.78% by carpenters and 20.83% by tailors. It is evident from data presented in the study before taking micro credit from ADBP 5% were well to do, 13.33 % were better off and 55% were poor, while 26.66% were very poor. 48.33% of respondents were sanctioned Rs. 20000- 25000 as credit, 38.33% got Rs. 15000-20000, 13.33% were sanctioned Rs. 10000-15000, none of the respondents were sanctioned credit more than Rs. 25000. 85% respondentþs mode of repayment was in installments, 15% reported that their mode of repayment was in lump sum. 56.36% had paid 1- 4 installments and 43.63% paid 5-10 installments. 91.66% replied that there was increase in their income after taking micro credit, while remaining 8.33% informed that their income had not been increased after taking micro credit. 60% informed that due to small size of loan their income has not increased and 40% reported that their income has not been increased because of increase in expenditures. 90% reported that they received loan time and they have faced no problem in receiving, 10% said that they were not given loan in time. It is clear from the analysis that 50%, i.e. 2 out of 4 misutilized the credit for the marriage of their daughters, and other 50% also misutilized by investing that credit in construction of houses. About 78% reported that they had been provided technical know how along with micro credit for i proper utilization, only 22% reported that there was no technical know how provided with micro credit. 55% said that amount of the loan provided by ADBP is satisfactory, 25% reported that loan size is unsatisfactory, while 20% regarded loan size as ideal. The analysis shows that 31.66% said that lending procedure of ADBP is satisfactory, 63.33% said it ideal, while only 5% told that it is unsatisfactory. According to study, majority of the respondents 93.33% said that recovery procedure of ADBP is satisfactory, 18.33% reported that it is ideal, while 8.33 % regarded recovery procedure as unsatisfactory. 90% were of the view that they prefer credit through installments, and 10% were of the view to repay in lump sum. The study shows that majority of the respondents 96.67% reported that they were satisfied with the current procedure of their installments, and only 3.33% were not satisfied by the procedure of installments. 100% responded showed that they are satisfied from the behavior and dealing of ADBP staff. About 72% of the respondents said that interest: rate charged by ADBP is high, 22% regarded it as reasonable and only 6% declared it as low.