Entrepreneurship, Financial Sustainability and Wellbeing: A Comparative Analysis of Islamic and Conventional Microfinance programme
Author: Hafiz M. Waqas

This study has focused on following three main objectives; a) to examine the structure of conventional and Islamic microfinance programmes b) to observe the impact of both sorts of microfinance programmes on employment, entrepreneurial development and household wellbeing and c) to estimate the impact of microfinance programmes on financial sustainability of micro enterprises over time period. The study has used both primary (Survey of Entrepreneurship and Financial sustainability of Microenterprises 2017) and secondary dataset for analysis of role of microfinance in entrepreneurial development and on financial sustainability of micro enterprises. Our analysis shows that the half of the respondents are uneducated and 60 percent of respondents have age between 25 to 40 years. About 50 percent of respondents received microfinance loan range from Rs 50K to 100K. The Akhuwat Foundation offered maximum Rs 150K as loan, while the JWSP offered loan more than Rs 200K. The investment culture in Akhuwat recipient’s micro-enterprises is higher as compared to JWSP recipient’s micro-enterprises. It is also observed the only 11.62 percent household started their business after joining MFIs and left-over recipients used their loans in homes. This study has found that microfinance has no relationship with development of micro enterprises. Personal saving and retained earnings have positive role while coefficient of other loan has negative impact in development of micro enterprises. Characterises of micro enterprise such as MFIs, gender, location, education and ownership, have no role in entrepreneurial development of micro enterprises. The location of enterprises plays a vital role in growth of net profit. The important thing is that the variables such as microenterprises size, employment, marketing, business plan and experience have no role in development of micro enterprises. Our analysis related to the financial performance of micro enterprises shows net profit has a significant and positive relation with financial sustainability. The odd ratios of microfinance loan, retained earnings and other loan have negative impact on financial sustainability of enterprises. The insignificant odd ratios of marketing and business plan reflects the real scenario of micro enterprises in Pakistan that majority of entrepreneurs are uneducated and they have no idea of how to expand their business Supervisor:- Dr. Shujaat Faooq

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Supervisor: Shujaat Farooq

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