Rural Credit and Enterprise Development: A Way to Combat Poverty through Institutional Loaning

Abstract

Generally, poverty means low standard of living. The disproportionate increase in the distribution of wealth has become one of the main ills of society in these days. Lot of people suffers from the pain of poverty because of high population growth rate. In order to curtail poverty, the government has devised different policies and plans in assistance with private sector and various NGOs. The main impetus behind these policies was to get benefit from the Bangladesh experience of Grameen bank. This bank gives loan to resource less people particularly to women. This model has been adopted by many countries around the world as well as by Pakistan. The present study was conducted in Pallandri Tehsil of district Sadnothi of Azad Jamu & Kashmir where National Rural Support had started a project by establishing an organization known as Rural Credit and Enterprise Development. The results of the study indicate that a little support to rural household helps to increase its income level. There was an average increase of Rs. 1268 in the income per month of the respondents. The credit facility also enabled them to save a little amount of money. The mean value of the data shows that the average increase in the saving of the respondents was four times after taking loan. However, a majority of the loanees (80 percent) expressed inadequacy of the loan and 52 percent of them were not satisfied with the repayment schedule. They were of the view that the given time period was too small to fully harnesses the benefits of the project.