Purpose: The purpose of this paper is to examine the effectiveness of microfinance loans in Pakistan. The purpose is that how much the microfinance loans are effective in Pakistan from the borrower perspective. The loan which is took by the client of Micro Finance Tamer Bank how that loan amount has been used in the projected business and whether the income has been increased by the loans utilization. Research methodology: The purpose is to find different factors which are affecting the effectiveness of the microfinance loans. Three variables have been identified to examine the effectiveness of the loans that are procedure, loan consumption and income. To study these factors a logically questionnaire has been developed by the researcher herself and floated to the Microfinance Timer Bank borrowers and the data is analyzed by the regression analysis. Findings: Data findings are procedure is affecting the loan consumption but income does not depend on the consumption of the loans. Conclusion: Microfinance institution should extend its reach by providing information and should consider the core to make the microfinance loans more effective as it for the low income households.