Microfinancing for better future.

• Author: Sandhu, Amna S.

Byline: Amna S. Sandhu

The 2018 Economic Survey revealed that in Pakistan the percentage of people living below the poverty line has fallen over the decade but still stands worryingly at 24.3% in 2015-16. The adverse economic and social effects of poverty are well-researched and used as basis for many social welfare programs across the globe.

This article specifically discusses the adverse impact of poverty on children education and how microfinance can help. It highlights the inter-generational vicious cycle that emerges from lack of education that translates into life-long struggles for individuals and their families. Ample fieldwork by rural support programs has established an inextricable relationship between poverty and education. In simple terms, families living below poverty line may not be able to afford education for children and rather employ children to daily wage work to survive, which leaves the children without literacy skills essential for well-earning jobs in the future. These children, then as adults are in a similar situation and with few options but to send their children to work rather than school as well.

Within the South Asian region, Pakistan has one of the lowest literacy rates. The current state of education specifically elementary education in Pakistan is alarming, to say the least. There are almost 22.8 million children out of school between the ages of 5 and 16 years and 49% of all out of school children are girls.

Education plays a considerable role in boosting socio-economic growth in developing countries. Good quality education can be the catalyst needed to end the cycle of intergenerational poverty and put families above the poverty line. It has an inherent uplifting effect on other aspects of society as educated adults are better equipped to make day-to-day life decisions related to nutrition, healthcare and other social issues for themselves and their children.

State plays an important role in combating education sector by formulating economic and social policies that tackle issues such as access to good quality education. However, in 2017, only 2.76% of GDP of Pakistan accounted for the education spending. This low share effects both the quantity of schools and the quality of education provided in these public schools. Research in education sector has found structural gaps on supply side such as increasing fiscal pressures, increasingly unmet demand for education, poor management of the education...