An empirical analysis of factors that determine poverty among the beneficiaries of Pakistan Poverty Alleviation Fund

Abstract

Purpose This study aims to examine the determinants of poverty among microcredit beneficiaries in Pakistan Poverty Alleviation Fund. Design/methodology/approach The study is based on a nationwide survey of microcredit beneficiaries of Pakistan Poverty Alleviation Fund. Using the national poverty line, this study classified borrowers into the poor and the non-poor. A Tobit model was estimated to examine the determinants of poverty among the borrowers. Findings The model was found to fit the data well and six out of the ten specified independent variables are found to be statistically significant. Practical implications The results of the study can be helpful in fully characterizing poverty dynamics and in policy formulation in using microcredit to reduce poverty. Originality/value The paper is the first to examine the determinants of poverty among Pakistan Poverty Alleviation Fund recipients.