DOES RURAL MICRO CREDIT IMPROVE WELL-BEING OF BORROWERS IN THE PUNJAB (PAKISTAN)?

Rural micro credit is intended primarily for investment in rural productive activities to improve well-being of poor. however, its use to meet daily consumption needs is not prohibited. nonetheless, credit increases income and consequently effects consumption. punjab rural support programme provides micro loans to rural poor who have regular source of income. the study uses six years (1999-2004) secondary data and primary data of 2005. primary data, using stratified random sample technique of variables like credit, income, assets, education and family-size, was collected and applied to multiple regression model. it was concluded that micro credit was largely availed by the poor borrowers, however, non-poor also availed micro loans. also per capita credit to poor was less than per capita to non-poor. the results show that it is not just micro credit but education also improves income. assets and family size has insignificant role in income improvement. in rural areas therefore, the micro credit organization need to focus on the amount of loan, customize and geographically target new loan products and discourage misdirected use of micro credit so that income of poor may improve.