Role of Bank of Khyber in Enhancing Income of the Poor through Microfinance

This research aims to study the role of Bank of Khyber (BOK) in enhancing income of the poor through microfinance in rural areas of district Peshawar, Pakistan. To examine the effect of microfinance on income of the respondents, comparison of their average monthly income before and after the loan was made and paired t-test was applied. The overall effect of microfinance was found significant and the perception of borrowers revealed strong association between awareness and satisfaction regarding the microfinance program. It is concluded that easy accessibility to the Bank, simple lending procedure and low interest rates were source of attraction to the borrowers. The BOK performed an important role in providing financial assistance to low income families in the study area and gave them an opportunity to become self-sufficient. Hence, the involvement of government-owned commercial banks in microfinance would be a key step to take these services at the doorsteps of the low income people. To facilitate and encourage the rural poor for financial sustenance, the Government should establish commercial microfinance banks in the rural areas. This will encourage the rural people, especially the poor to access the formal institutions for their financial needs.