Open Access Article

Impact of Financial Inclusion Using Community Investment Fund on Poverty Graduation in Rural Sindh of Pakistan

Authors

Talat Anwar(1) Talat Anwar Corresponding author Affiliation Professor SBP Memorial Chair, School of Economics, Bahauddin Zakariya University, Multan Email addresstalat.anwar2016@gmail.com Other articles by this author , Fazal Ali Khan(2) Fazal Ali Khan Affiliation PhD Scholar, University of Lisbon, Portugal Other articles by this author , Lubna Hassan(3) Lubna Hassan Affiliation Senior Research Economist, Pakistan Institute of Development Economics, Islamabad Other articles by this author , Amna Ejaz(4) Amna Ejaz Affiliation Research Lead (SUCCESS), Rural Support Network Programme, Islamabad Other articles by this author

  1. Professor SBP Memorial Chair, School of Economics, Bahauddin Zakariya University, Multan
  2. PhD Scholar, University of Lisbon, Portugal
  3. Senior Research Economist, Pakistan Institute of Development Economics, Islamabad
  4. Research Lead (SUCCESS), Rural Support Network Programme, Islamabad

https://doi.org/10.36923/jcmi.v6i1.640

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Abstract

Financial inclusion offers significant benefits to the unbanked poor population, but barriers such as low literacy, lack of trust in formal financial institutions, and high transaction costs often hinder the use of formal banking services. On the other hand, the Community Investment Fund (CIF) is a revolving grant managed by community-based organisations that provides a low-cost, sustainable solution. The paper examines the impact of financial inclusion through CIF funds on poverty graduation in Rural Sindh, Pakistan. The Poverty Scorecard (PSC) tool is used to assess the changes in the poverty status of CIF loan and grant beneficiaries using before-and-after approaches. A household survey dataset from rural Sindh, covering 4,023 randomly selected households, is analysed. The findings suggest that financial inclusion through community investment funds has positively impacted poor households and helped them graduate from a lower poverty band to a higher one. Compared to conventional sources of finance like Microfinance Banks, the findings suggest that CIF loans appear to be largely cost-effective. We thus recommend increasing CIF coverage for poor segments of the population in Pakistan, as it provides a low-cost, sustainable solution for poverty graduation and increases the cost-effectiveness of social protection programmes in the country.

Article information

Keywords
povertyfinancial inclusionmicrofinanceCommunity Investment FundCommunity-Driven Development
Section
Articles
Issue
Vol. 6 No. 1 (2025)
Submitted
April 6, 2025
Accepted
June 25, 2025
Published
June 25, 2025
Corresponding author
Talat Anwar
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