Purpose of the study: Microfinance institutions (MFIs) are delivering various services of microcredit, savings as well as insurance. The key objective of microcredit is to decrease the poverty level and for empowering the women as well as other poor people under various developing countries. There is the various factor which effects on the demand of microcredit. Therefore, the objective of the current study is to explore the factors which affect the demand for microcredit. Methodology: In this conceptual study, the qualitative research technique was used. The data were collected from previous research studies and companies’ websites. Main Findings: It is concluded that numerous factors may influence the demand for microcredit by the various borrowers. These comprise the interest rate, the relationship between lenders as well as borrowers, different government policies, gender differences, prospective beneficiaries, the creditworthiness of the borrower, transaction cost, limited access to credit, economic condition and the availability of information. Applications: This helps analyze the barriers which the borrower and lender must face in operating the microcredit. In this way, microfinance institutions can take help from this study by considering these factors during the distribution of credit. Novelty/Originality: The findings of this research study fulfilled the theoretical gaps in the literature by identifying the different fact which may help to revise the poverty level. Future research studies may focus on these factors, which may help to increase the economy and reduce poverty in southern Punjab, Pakistan.