The role and analysis of Microfinance Banks in Pakistan
The previous decades are marked with the observable and documented economically developmental role of Microfinance banks (MFBs) in country, which is developing and transitional economy, yet no exhaustive research on the role and analysis of MFBs has been done to map its issues & challenges in terms of local fit and in a global setting. The researchers have addressed this empirical-cum-academic call to pave the way for further convergence-oriented research to deeply learn about the contemporary areas untapped. This study aims at presenting the basic objectives, functions, scarcity mitigation capacity, and economic connection of MFBs with common public at large. The performance of MFBs in Pakistan is analyzed through Financial Ratio Analysis (FRAs) to characterize on the performance on besieged MFBs. The results depicted that the MFBs in Pakistan have a definite role and performance-based impact on the economic development of the country, which has been overlooked for long period. At firm level, the performance of NRSP and Khushhali Banks (KBs) was observed to be surpassing among 8 MFBs selected for the research. The NRSP retained net profit of Rs. 821,474 and KBs produced Rs. 1.8 M (million). Moreover, NRSP composed investment of Rs. 2.69 M and KBs Rs. 16.29 M. The return on assets of NRSP of 2.45% and return on equity of 21.23%. Furthermore, the Return on assets of KBs 3.05% and return on equity is 28.34%. The strategies adapted by these two MFBs are learning grounds for others for bottom-up prosperity by financially supporting the small entrepreneurs, as per the need of the present.