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Impact of Microfinance on Socioeconomic Status of Farmers in District Dera Ismail Khan

Muhammad Naveed Anjum1, Abdur Rehman1*, Muhammad Niamatullah Khan1, Raheel Saqib2, Mohammad Fayaz3 and Iqbal Javed4

1Institute of Social sciences, Department of Agricultural Economics, Faculty of Agriculture, Gomal University, Dera Ismail Khan, Khyber Pakhtunkhwa, Pakistan; 2Department of Agricultural Extension, Education and Communication, The University of Agriculture Peshawar, Khyber Pakhtunkhwa, Pakistan; 3Department of Agriculture and Applied Economics, The University of Agriculture Peshawar, Khyber Pakhtunkhwa, Pakistan; 4Department of Economics, The University of Lahore, Sargodha Campus, Sargodha, Pakistan

*Correspondence | Abdur Rehman, Institute of Social sciences, Department of Agricultural Economics, Faculty of Agriculture, Gomal University Dera Ismail Khan, Khyber Pakhtunkhwa, Pakistan; Email:


The main purpose of this study is to assess the impact of microfinance on the socioeconomic status such as, family income, family health status, children educational status, living standard, food/diet pattern, crop production and transportation and finally the constraints faced by the borrowers to get the loans from microfinance institutions. The primary data were collected from the 300 borrowers of microfinance institutions especially from Khushhali Bank limited through a well-designed structured questionnaire. The descriptive, inferential statistics, chi square statistics and simple linear regression models were used. The results of the study highlighted that 72.2% of the farmer’s incomes increases due to microcredit’s facility and due to increase in income, the farmers are able to get more access to the health facilities than before. 82.2% farmer’s response indicated that the microfinance have a positive and significant impact on the children’s educational status and due to microfinance their children were moved from government to private schools. Moreover, the parents whose children were not getting their education from the educational institutions due to their financial crisis and issues, now the parents sent their children to the educational institutions. 85.1% farmers replied that there is significant enhancement in the family living standard due to microfinance facility in the research area. It was also discussed that constraints experienced by the borrowers in getting the loans from the Khushhali bank limited and other microfinance institutions. The borrowers enumerated different problems such as high interest rate, no information about microfinance institutions, the complicated loans procedures, not believing on microfinance, small loan amount and not availability of loan at proper time. The farmers contacted the local agricultural credit officers, with governmental and non-governmental organizations and with different friends and relatives. The overall study concluded that the socioeconomic status of the farmers had been improved due to microcredit facility from the Khushhali Bank limited and other governmental and nongovernmental micro financing institutions in D.I. Khan. Finally, the study recommended that the government should manage the interest free loans, provide loans at earliest, shortest possible and at proper time, the government should need to increase the average size of the microfinance loans and create awareness through media.


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Sarhad Journal of Agriculture


Vol. 38, Iss. 3, Pages 759-1159


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