Effects of Legal and Cultural Attachments on Microfinance Capital StructureUmme-E-Aiman* and Habib Ahmad Department of Finance and Financial Management, Foundation University, Rawalpindi, Pakistan transfers [1]". Many of those who promote microfinance generally believe that such access will help poor people out of poverty, including participants in the Microcredit Summit Campaign. This study aims to identify the impact of legal traditions, creditor rights and financial sector development on capital structure of MFIs. Literature ReviewThere are hardly few articles concerning the financing procedures and capital structure which focuses on the issue of creditors' rights, depositor protection and legal traditions and terms for microfinance institutions. Microfinance institutions cover an extensive range of funders that differ in terms of legal traditions, objectives, target market and approach style. CGAP research (2011) shows that despite of tensed budgets and worldwide financial crises, the levels of cross-border funding continued to increase, but at a much lower growth rate [4].Researchers have a grade contribution regarding the relation between finance and law and finance sector development. They found that when the outside investors are not adequately protected with the help of legal framework offered by a country in the result of which entrepreneurs and actual owners are forced to sustain big positions themselves to line up their incentives with other investors [5]. More clearly, countries with weak investor protection should have more intense ownership structures. Hubert Tchakoute Tchuigoua in his article of 2014 says that AbstractPurpose: The basic intention behind this article is to find that how legal bindings and financial developments sector influence the capital structure of micro finance institutions.Design/methodology/approach: Panel data of 87 countries is used in the analysis from 2004 to 2013 with annual frequency. Random effect is used after Hausman specification. Findings:Result shows that good and prudential legal tradition, may pave way for foreign investments by gaining trust and in this way economic development of country move towards progress. But one variable (depth of credit information) shows inverse relationship with leverage. This is because some time when MFIs fully disclose their financial structures and terms and conditions, they fail to get the investors' confidence because of gap between investors and MFIs interests.Originality/value: We found limited research work which has been carried out to answer the question that how capital structure respond to the legal traditions and geographical bindings of country.