MORE THAN MONEY: THE ROLE OF MICROFINANCE PROVIDERS IN BUILDING THE ENTREPRENEURIAL SKILLS OF THEIR CLIENTS

Back to Page Authors: Sehr Khaliq

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Keywords: microfinance, entrepreneurship training, public policy, Pakistan, sustainable development

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Abstract: This research explores the factors impacting the ability of microfinance providers (MFPs) in Pakistan, to invest in enterprise training for their clients. Despite a growing body of international research on the value of entrepreneurial training for microentrepreneurs and MFPs, none of the 9 microfinance banks (MFBs), and only 18 of the 35 microfinance institutions (MFIs) surveyed in Pakistan (PMN, 2016) offered any enterprise training to their clients. The research seeks to understand the reasons for this gap. Based on interviews with a purposive sample of MFBs (representing over 80% of active MFB borrowers), and MFIs (representing over 75% of active MFI borrowers), as well as training and donor/support organizations in the country, the research seeks to understand whether MFPs believe there is a need for entrepreneurial training among their borrowers, whether they are investing in offering enterprise training to their clients and what factors impact their decision to invest in such training. Drawing on primary research and an extensive literature review, the research seeks to understand to what degree McKenzie and Woodruff’s (2013) analysis of the main barriers to investment in enterprise training (information constraints, financial constraints, risk constraints and supply constraints), applies to MFPs’ decision to invest in enterprise training for their borrowers in Pakistan. The research offers insights into the MFPs’ perspective on enterprise training and explores the role played by the policy in balancing the need for building a profitable and sustainable microfinance sector with the goal of building profitable and sustainable microentrepreneurs.

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