What is microfinance and what is its role in poverty alleviation? What is the impact of microfinance in the society at large, especially Pakistan? What are the arguments against microfinance and what challenges does it face in Pakistan? PILDAT Background Paper on Microfinance Sector in Pakistan attempts to answer some of these key questions. Prepared especially for the benefit of elected representatives, media and the civil society groups, the paper serves as a background to PILDAT’s briefing sessions on the topic of “Microfinance and the Society.” The paper is written by Ms. Roshaneh Zafar, Mr. Aqdas Afzal and Mr. Nabeel Khan of the Kashf Foundation, a leading specialised Microfinance institution in Pakistan, while it is edited by PILDAT.