The Micro Finance Bank of Pakistan - Essay Example

The institution made small cooperative societies in every village of around 100- 200 households. MFBP advanced loans for the rehabilitation of scrub forest, indigenous poultry, sheep and goats, and wherever possible dairy farming (MFBP 2006).

The recoveries were effected through local headmen. Loans for tractors as carriage vehicles and bigger mechanical shops and gas stations were also sanctioned. By and large, the response was positive. In early 2000 it was observed that the same district had shrub forest, developed shops, big poultry farms, and organized sheep and goat farms. The shops are looming on the roadside. There are hundreds of girls in the local private English medium schools by now. The bank's recovery rates are 85-90 %. The potential impacts of such institutions are far-reaching on poverty alleviation in the third word.

These institutions are specialized in the identification of the right causes of poverty in different communities and the redressal recipes are tailor-made. Their approach is quite befitting and these institutions provide the grassroots solutions for the problems. Instead of operating on the macro-policy levels, these institutions look at the poverty issues in a different kaleidoscope. Therefore so far single panacea for poverty alleviation has been the alternate institutions. The support for them should continue.

Recommendations. World Bank should continue supporting the alternate financial institutions in the developing countries because these institutions are addressing the issues of poverty in a befitting manner. The other commercial banks cannot and do not ration the credit for the small farmers, artisans, unemployed youth, and the homeless destitute because of the lack of their capacity. The alternate institutions have developed operational mechanisms and have evolved strategies to tackle the poverty alleviation challenges at the grassroots level.