Mubashir Mukhtar

Paradigm Shift

From Micro Financing Institution To

Micro Enterprises and Household Development Institution

A Local Economic and Financial Development

Summary: Given the current Pakistan’s economic situation it has become increasingly important to search out ways which could comprehend the ever burdening poor and middle class i.e. nearly 80 percent of the population from the effects of Poverty, Unemployment and Inflation, a way or model which would take control of all these three macroeconomic indicators simultaneously and provide a backbone to population plus the country. A system which could sustain under the prevailing economic and financial system and at the same time able to provide the positive results for all the stakeholders i.e. poor, middle and rich. This study outlines a model conceived on the fundamentals of business (tijarah) by connecting the markets from the producers to wholesalers to retailers and finally the consumers. The proposed institution is in itself a wholesale business entity, giving opportunity to the poor’s to start a micro business (micro enterprise) and providing opening to the local manufacturer’s/producers to introduce their products in the local market. Helping the household members of the poor client by giving education to the children, providing primary health facility to children, women, elders and providing a social pension scheme for the elders to smooth consumption over lifetime, all of these by carrying benevolence on primary level and arranging a market mechanism on the secondary level. The boosting of local economic activity perceived in this model aligns with the approach opted by the elite controlling organizations i.e. UN, IMF, World Bank and ILO. Finally for the sake of saving the poor and the society on the whole from the effects of inflation, the induction of commodity money is proposed within the brackets of this model. Thus on the basis of pure co-operation all the stakeholders can immensely benefit and create a society based on justice. By the end this study also seeks the economic lives of the poor, their consumption and income pattern by going through the published household surveys as well as by conducting a survey among the micro entrepreneurs so that an in-depth view regarding the choices, constrains and challenges they face could be gained.

A View on Prevailing Economic and Financial System: A background study which opened many dimensions for me, related majorly with monetary but impacts on every aspect of life. See the attachments.

Further Potential Research Areas:

See the attachments