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This paper analyzed the cause of poverty in rural areas of North- Western region of Pakistan. Poverty in rural areas of Pakistan is still considered as big dilemma and absolute hurdle to the development, by considering this issue this study was carried out in Khyber Pakhtunkhwa province opting mix method approach. One (01) district from each of the four (04) agro-ecological regions of the province was selected purposively. The targeted study districts were Peshawar, Mansehra, D.I. Khan and Swat. From each study district, 100 respondents (rural residents) were randomly selected and personally interviewed. Total sample size of the study was 400 respondents for the collection of quantitative data. Additionally, focus group discussion meetings were also conducted for collecting qualitative data. A pretested interview schedule was used for the collection of quantitative date while an interview guide was used for qualitative data. Descriptive analytical techniques were used for quantitative data and content analysis method was used for qualitative data. Findings conclude that only 13.12% of the total area is cultivated by majority the rural population of the province. Financial constraints, derivation of basic needs, homelessness and facing discrimination were regarded as the attributes of poverty by the respondents. Limited access to income generation opportunities was regarded as the root cause of poverty with mean value of 4.86/5.00 followed by limited access to education (4.76/5.00). Lack of access to basic livelihood necessities (mean value=4.88) and basic human right (mean value=4.82) were regarded as most popular materialistic and non-materialistic impacts respectively of poverty in rural areas of the province. This deprivation in the province causes poverty and leads to the involvement in illegal and unethical activities by the rural residents specifically. Ending their deprivation in actual and eroding the sense of deprivation is the only solution that can be ach

Rural development agencies have been regarded as important performers in terms of influencing development policies and programmes in rural areas of the world. The main focus of these programmes is to uplift the living standard of the masses in rural areas through sustained growth in the rural economy. To improve the livelihoods of rural communities, the government has adopted various rural development programmes, but the majority of them left very little effect on the ground. Many of these programmes had been inspired by the western paradigm. Categorically the efforts to uplift the livelihood of rural population in the North-Western Pakistan, have gained little success. According to recent reports, about one third population of mountainous region is still facing the problem of food insecurity, poverty and hunger which results in economic and political instability. Considering this, the government has launched many rural development programmes but almost all of them were terminated after gaining little success. Although the overall approach was institutional in nature but it failed to promote institutional aspect of rural development. Leading constraints to the rural developmental strategies include shortage of funds, dominated status of bureaucracy and lack of coordination among the implementing agency and local community. Besides state owned programmes for rural development many non-government organizations (NGOs) are also involved on the theme of development that is participatory for the decades. Among those initiatives Agha Khan Rural Support Programme (AKRSP) remained quite successful in northern areas of Pakistan. However, rural development through participatory approach is still far behind the predicted results and these organizations are facing problems in delivering welfare services to the rural poor as they are being blame that they are working on western agenda.