Effect of Financial Development on Poverty: An Empirical Case Study of Pakistan

This research emphases on the effect of Financial Development (FII) on poverty of Pakistan. Time series data from 1980 to 2024 is used in this study and Auto Regressive Distribution Lag (ARDL) technique is incorporated to estimate the regression result. Foreign Direct Investment (FDI), inflation, domestic credit to private sector by bank, poverty headcount ratio at national poverty lines are the variables used in this study. Long run relationship is found between FII and poverty. Regression results have ascertained that a joint effect of FII and FDI significantly reduces poverty. For the policy recommendation this study process to create concentrated policies for attracting FDI and using it with FII for lowering down the poverty pressures.