A Study on Micro Finance with Special Reference to Assam

Authors: Dilip Ch. Das

Country: India

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Abstract: In a country like India where 70% of its population lives in rural area and 60% depend on agriculture (according to the World Bank reports), micro-finance can play a vital role in providing financial services to the poor and low-income individuals. Micro-finance is regarded as a useful tool for socio-economic upliftment in a developing country like India. It is expected to play a significant role in poverty alleviation and development. The emphasis of present paper is to study the performance and role of microfinance institutions in the development of India. The study revealed that the number of MFIs availing loans from banks during the year 2015-16 and 2016-17 increased from 9.8% to 257.6%. The total loans to MFIs by banks decreased during 2016-17 by 7.2% over the previous year. The loan outstanding against MFIs increased all the subsequent years. It increased by 13.7% and 14.3% in 2015-16 and 2016-17. It is further found that the business models of MFIs in India are becoming urban centric as is indicated by the fact that the share of rural client’s base of different states/UTs in 2017 with 2016 has declined, except Assam, Arunachal Pradesh, Nagaland, Jammu & Kashmir and Andaman. The highest increase was in Andaman (267%) followed by Jammu & Kashmir (17%). The proportion of income generation loan remained same during year 2015 and it increased up to 94% in the year 2017. The indicators relating to overall financial structure such as Return on Assets and Return on Equity, capital adequacy ratio have increased over this period and found sharp decline in total assets of MFI’s.

Keywords: Microfinance, MFIs, Growth of Microfinance, Poverty

Paper Id: 230109

Published On: 2017-04-25

Published In: Volume 5, Issue 2, March-April 2017

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