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Ever since the Grameen Bank in Bangladesh became successful and resulted in its founder Mohammad Yunus getting

a Nobel Prize, microfinance has been seen as a great poverty alleviation tool. More and more economists are trying out the Grameen Bank model and hoping it works in other countries too; microfinance has thus also been started in Pakistan. While we do not have a success as prominent as Grameen Bank but the situation has definitely been improved over here. Microfinance works because poor people cannot get financing from normal banks. People who own nothing and cannot pay anything as security are not considered a safe investment by banks and are unable to get a loan. The odd thing is that these people generally require such small loans that the bank can lose the money and still not have a problem. The lives of these people can be improved for as low as 5000 rupees by getting them a sewing machine. Kashf Foundation is one of the first microfinance institutions which made it to Pakistan and it serves women who need small loans. The foundation has been a success and reports that it has handed out small loans to more than a million people. Some other institutions also working are the First Microfinance Bank, BUSTI (Basic Urban Services for Kacchi Abadies, Fellowship of the Least Coin and many more. Microfinance, I it becomes successful, can help many people get out of the poverty spiral.