Microfinance: Paving Pathways to Sustainable Development

ABSTRACT

The objective of the present study was to analyse the status of microfinance in India, with a specific focus on Self-Help Groups (SHGs), by gathering secondary data from government reports. Utilizing descriptive statistics, the study examined key performance indicators such as average savings, loan disbursements, and outstanding loans across various banking institutions, including commercial banks, regional rural banks (RRBs), and cooperative banks during the fiscal year 2022-23. Key findings revealed significant trends, such as growth in SHG savings and loans disbursed, with notable increases in average savings for cooperative banks and loan disbursements for commercial banks. However, a decline in loan disbursements by RRBs and high Non-Performing Assets (NPAs) in cooperative banks, particularly among women’s SHGs, were also highlighted. The study suggests enhancing loan disbursements to RRBs, reducing NPAs through financial literacy programs and better credit counselling, and strengthening support for Microfinance Institutions (MFIs) to boost financial inclusion. Additionally, a focused effort on supporting women’s SHGs and expanding cooperative bank involvement, particularly in underserved regions, along with improved monitoring and evaluation systems, were recommended to ensure the sustainability and effectiveness of microfinance initiatives in India.

FULL TEXT