Performance assessments of micro credit programs

Ahmed Nawaz Hakro

Abstract

The study has been designed to assess the performance of micro credit programs and institutions in Pakistan, Broad category of performance indicators such as, program scale, target groups, efficiency of program services, services performance, cost effectiveness, and sustainability have been used. For institutional capacity assessment parameters; financial capacity, financial conditions, viability, sound management practices etc have been used. Results indicated; micro credit programs have sound financial size but unable to reach the significant number of poor. Size of amount disbursement is very significant, operational efficiency is negative or at least the micro finance institutions are not profitable. Programs are cost effective, moderately efficient but financially unstable. The targeted participation is very low. The service performance is moderate. The efficiency, profitability, capital formation and other financial ratios do not show the long run sustainability of the overall financial performance of the institutions. There is strong need of the policy/intervention to make these programs more efficient and financially sustainable. It is strongly suggested that micro finance institutions. government/semi government should formulate the framework for program monitoring and evaluation and make baseline studies to measure the impact and magnitude of change in longitudinal studies.