There is a growing community of organizations committed to eradicating poverty through the delivery of financial services to the poor and the low-income people throughout the world.

Known alternately as microcredit or microfinance, this partnership of public and private interests began to gain momentum in the mid-1970s. By the end of 2001, microcredit was provided to 26.8 million people--though this represents only about six per cent of the estimated number of poor who could effectively use credit and related financial services including savings, insurance and asset-building systems. The microfinance model is well tested, but the need far exceeds the current capacity.

The UN General Assembly designated 2005 as the International Year of Microcredit and has invited governments, concerned non-governmental organizations and others from civil society, the private sector and the media to join in raising the profile and building the capacity of the microfinance sectors. Through a concerted, collaborative and spirited effort by stakeholders, micro ? credit can play an even larger role in the global strategy for ? meeting the Millennium Development Goals (MDGs) and the commitment to cut poverty in half by 2015.

The United Nations Capital Development Fund (UNCDF), as the ? policy advisory and technical assistance center for microfinance ? for the United Nations Development Programme Group, expects to ? play a joint coordinating role in the Year with the UN Department ? of Economic and Social Affairs (UNDESA).

But what microcredit institutions are doing in Pakistan? The current situation here is in some way improving. Let us have a look at it.

In Pakistan, most of the poor are living in the rural areas. Also, the level of poverty is higher in rural than urban areas. So most of the rural people are engaged in farming (crop and live stock), and non-farm source has become more important for household incomes. House hold income which is decreasing and is creating an ugly situation in the rural areas. People's dependence only on one source of income is not sufficient while keeping in mind thepresent scenario of inflation.

Fortunately, our agriculture has experienced more than modest growth, but its benefits have not been transmitted to most of the rural poor. An important part of the explanation for the gap is in the structure of rural assets and government policies that do not allow the poor the access they need to the income-earning assets like land and finance, physical and social infrastructure, and support services. Land reforms are still on papers only, and no sincere efforts have been made for the implementation of these land reforms,

Rural support programme networks are making some efforts in organizing the communities. The first large-scale experiment of social organization in the rural communities, called the Aga Khan support program (AKRSP), was started in 1982. Its success by the late 1980s gave impetus to the growth of larger programmes of rural support. The federal and provincial governments have also established rural support programmes. These rural support programmes (RSPs) in are "harnessing the potential of the people". Three main principles laid down for RSPs are as under:

*It is proven by development experience of different organizations that social mobilization is the first step in the direction. The RSPs main aim is to bring the poor into an organized fold. Social mobilization is based on the assumption that people, especially the poor, landless and assetless are willing to do many things to improve their situation.

* Next is upgrading the human skills of the poor such as managerial, productive and cooperative to enable them to make best use of available resources.

* Generation of capital by the poor through the discipline of savings as capital is power without which the poor can never hope to be self-reliant.

Thousands of the male and female community organizations have been formed and billions of rupees have been disbursed for agriculture, live stock and enterprise development. Hundreds of families have come out of the clutches of poverty and they are now on the list of better- off communities. Thousands of unemployed youth have developed their skills and many of them got jobs.