A STUDY ON THE PERFORMANCE OF MICROFINANCE INSTITUTION IN INDIA

Abstract

The present study is an attempt to study the importance of microfinance and to analyse the performance of microfinance institutions operating in India. Microfinance is a deep rooted financial system in India as a mechanism for disbursement and collection small scale funds. Due to inadequate banking channels in rural and remote areas, a large number of informal financial intermediaries particularly Microfinance have been mushroomed which are acting as a proxy to the banks. It emphasizes on rural economy and performs as mode of lifting people from the deprived section into the formal financial system, thereby it reduces the leakage of bogus financial services. Research design is partly descriptive, partly exploratory .The data for the present study was collected from different sources. To assess the performance of the microfinance institutions in India, The relevant information relating to loans disbursed, loans outstanding, client outreach, assets, etc. Were collected from Status of Micro Finance in India, NABARD report (various issues), The Bharat Microfinance Report (various issues) and other relevant sources for the period 2012- 13 to 2016-17. Simple statistical tools like averages, percentage, etc were used to derive the inferences of the study. The study aims to understand the concept and delivery models along with the role and importance of microfinance in India. It also tries to analyse the financial performance of MFIs like Return On Asset (ROA), Return On equity (ROE) etc. To rationalize the objectives of this study, hypothesis testing is applied among assessed variables. The study has been done based on exploratory research method by using five years data collected from various secondary sources.