Comparison of Interest and Interest Free Microfinance Institutes: The Study of District Bahawalnagar, Punjab, Pakistan

This study was conducted to made comparison between conventional microfinance banks & interest free microfinance institutes with special reference to poverty reduction. Primary data was collected from conventional microfinance banks including Khushall Bank Ltd, FINCA Microfinance Bank Ltd & Asha Microfinance Trust and interest free microfinance institute including Akhuwat Trust through a questionnaire comprises on 20 items regarding microfinance and poverty reduction including basic needs, living standard & self-employment. For data collection conveyance sampling techniques was used & sample size was comprises on 200 customers out of 100 customer of conventional microfinance banks and 100 customer of Akhuwat Trust. It is observed that customer of interest free microfinance institutes succeeded to reduce their poverty level by improving their basic needs & living standard as compare to the customer of conventional microfinance banks but product line and overall management and loaning procedure of conventional microfinance banks is better.