Optimal microfinance loan size and poverty reduction amongst female entrepreneurs in Pakistan

The purpose of this paper is to explore the impact of microfinance loans on poverty reduction amongst women entrepreneurs in Pakistan. The authors set out to establish whether there exists an optimal loan size to attain the objectives of women entrepreneurs and poverty reduction in this country.

This exploratory study is based upon an empirical investigation of 123 semi structured interviews as well as in-depth, semi structured interviews with a sub sample of ten women entrepreneurs who secured microfinance loans for their new or established enterprises.

Emergent results show that access to finance is important for female entrepreneurs and helps them realise their potential as entrepreneurs. An optimal, poverty reduction, microfinance size has been identified. A range of entrepreneurial characteristics were found to be critical to the success of women led enterprises in general and to poverty reduction amongst their families in particular.

This research focuses upon a relatively small sample of female entrepreneurs operating in the Pakistani economy. Although the results could be relevant to women entrepreneurs in other developing countries, caution should be exercised when attempting to generalise these finding to other contexts.

Emergent results make a contribution to research on women entrepreneurship in general and optimal microfinance loan size in particular.