Penetration of MFIs among Indian States: An Understanding Through Macro Variables

Sougata Ray () and Sushanta Mahapatra
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Sougata Ray: cef.up, University of Porto, Portugal and Amrita School of Business, Coimbatore, India

CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: The Indian Microfinance Industry witnessed one of the fastest growths in the recent times. However, the sticking feature of the growth is that the Microfinance Institutions (MFIs) are concentrated in only some regions of the country. There is a huge geographical skew in the distribution of the MFIs. In this paper an attempt has been made to explain these geographical skew by using the macro variables at the state levels. The purpose of this study is to identify the causes for the regional disparity of the growth of MFIs. The analysis is likely to help in identifying factors which need attention for developing the MFIs in states which are lagging behind and also in framing necessary regulations which can ensure uniform growth of MFIs among all the states. The study suggests that state level macro factors are significant in explaining the geographical skew. MFIs in India have concentrated in states which are richer, have good rural infrastructure, lack adequate banking facility and have low human capital.

Keywords: Microfinance Institutions; Penetration; Regional disparity; Macro variables (search for similar items in EconPapers)
JEL-codes: E44 G21 R5 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2014-05
New Economics Papers: this item is included in nep-geo, nep-mac and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Penetration of MFIs among Indian states: an understanding through macro variables (2016)
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