An Asian Development Bank (ADB) study, which was launched here on Tuesday, finds Khushhali Bank's operations in Pakistan have positively impacted on income generation, empowerment, health and education.
The study, prepared by the Asian Development Bank Institute, Tokyo, and based on data from 2,000 rural and urban households across the country, states the highest aggregate impacts of the programme on income-generating activities were in agriculture where all outcome variables - assets, inputs and sales - were higher for those who had access to the bank's programme.
Report findings, which were presented by Heather Montgomery, research fellow at the institute, further pointed out employment was generated in all sectors either by enabling start-up to household enterprises, household members ability to provide more labour hours to enterprises or more hiring of labour from outside the family to assist with those enterprises.
It says urban lending in particular yields significant positive impact on income generation from family-run enterprises and strongly impacted on empowerment, especially of women.
Access to and participation in the Khushhali Bank programmes increase empowerment of women, such as their decisions on child rearing, participation in community or political activities and financial matters.
Titled as "Meeting the Double Bottom Line", the study was aimed to assess whether it was possible for micro-finance institutions to simultaneously pursue profits and reduce poverty.
The study explores this question by analysing impact of the Khushhali Bank. Institute director Professor John Weiss comments: results of the study show the bank can scale up outreach while remaining focussed on core goals of operational and financial sustainability.
The study examines whether the bank has also had an impact on economic or social measures of poverty, including empowerment of poor women, or income-generating activities run by those households.
In his presentation of key findings, Heather Montgomery further noted impact was especially strong on measures of social and financial empowerment, such as the ability of women to get small amounts of cash when necessary from their own assets.
The impact of the programme on empowerment is even stronger when the borrower in the household is a female client. Lending to female clients is also found to reduce the incidence and frequency of arguments between male and female household members.
The study also showed the poor households with access to the programme are more likely to seek medical treatment for their health problems and more likely to seek trained professionals to provide that treatment.
These impacts are especially strong in the case of children's illnesses. Borrowers in groups mobilised by NGO partners were also more likely to seek medical consultations for pregnancies of female household members. Relevant to education, the study demonstrated that lending to women in particular, or to groups mobilised by NGO partners, yields additional impacts on children's education.
"These findings hold promise for millions of poor households in Pakistan. If the Khushhali Bank is able to maintain its current path toward full financial self-sufficiency, client households will continue to have access to micro-finance services and receive these benefits into the foreseeable future, regardless of the whims of donors and the development community," Dr Montgomery said.
Hopefully, benefits of this programme will spread even further. These findings demonstrate given a supportive regulatory environment, it is possible for commercial micro-finance banks to meet a "double bottom line" of simultaneously pursuing profits and a humanitarian social mission. Perhaps other countries can follow the path of Pakistan in promoting the development of a sustainable micro-finance sector that improves the welfare of the poor.
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