Socio-economic constraints to demand for borrowing among rural females of Pakistan

Purpose - The purpose of this paper is to investigate how many rural women have access to finance. It also explores the additional constraint faced by them in accessing the credit. Design/methodology/approach - For the estimation purpose, multivariate logit regression is used, taking borrowing any credit as dependent variable. Findings - Results indicate that women lack easier access to formal credit and the socio-economic, cultural background of the family significantly impact probability of borrowing. More specifically, result indicates that female own age, marital status and employment bring self-confidence and reliability that encourage female borrowing. Research limitations/implications - In the absence of any recent nation-wide data about micro-credit, cross-section survey, the Rural Financial Market Survey is used to examine the factors affecting the demand for borrowing. Practical implications - This paper proposes that government should implement education programmes in order to create awareness towards role of women in economic development. Moreover, to overcome the cultural constraints, information should also be disseminated through influential media. Originality/value - While it is widely recognized that, demand for credit is severely affected by socio-economic, cultural and personal characteristics, this has rarely been confirmed earlier. There are numbers of studies documented on borrowing all focus on the issue of formal and informal sources ignoring the above determinants. This paper attempts to do so.