Factors Effecting The Elasticity Of Micro Credit Demand In Southern Punjab, Pakistan

The purpose of this study is to explore the factors affecting the demand for microcredit among various borrowers, with a focus on identifying the barriers that influence microcredit utilization. This conceptual study employs a qualitative research technique, using data collected from previous research studies and companies’ websites. The findings reveal that numerous factors influence the demand for microcredit, including interest rates, the relationship between lenders and borrowers, government policies, gender differences, prospective beneficiaries, borrowers' creditworthiness, transaction costs, limited access to credit, economic conditions, and the availability of information. These factors highlight the challenges that both borrowers and lenders face in the operation of microcredit systems. The study concludes that by understanding these factors, microfinance institutions can improve their credit distribution processes and better address the needs of their clients. Furthermore, this research fills theoretical gaps in the literature by identifying key elements that can aid in poverty reduction. Future studies should focus on these factors to enhance economic growth and alleviate poverty, particularly in southern Punjab, Pakistan.