Return on Investment in Microenterprises Experience of the Borrowers of Pakistan Poverty Alleviation

Abstract

The paper estimates the return on investment in microenterprises by using the data collected by Pakistan Poverty Alleviation Fund (PPAF). The paper finds that in general borrowers remained successful in earning a net weighted average rate of return from 4.05 percent to 4.93 percent per month (or an uncompounded weighted average rate of 48.56 percent to 59.20 percent per year) across various businesses. Female borrowers earned higher return than male borrowers. There was also significant number of investors which suffered from losses. The paper also finds return to investment across various regions of the country. The highest rate of return was in the province of Baluchistan. It may be noted that small enterprises are almost neglected by the public sector. The findings of this study provide strong foundations to draw attention of public policy makers.