What Determines Enterprise Borrowing from Self Help Groups? An Interpretable Supervised Machine Learning Approach

Madhura Dasgupta () and Samarth Gupta ()
Additional contact information
Madhura Dasgupta: ConveGenius
Samarth Gupta: Ahmedabad University

Journal of Financial Services Research, 2024, vol. 66, issue 1, No 4, 77-99

Abstract: Abstract Despite several advantages associated with borrowing from micro-finance institutions, such as self-help groups (SHGs), many enterprises in developing countries continue to rely on informal lenders. Using machine learning techniques on a novel village-enterprise matched dataset from India, we predict an enterprise’s choice of credit source as a function of three key mechanisms: supply-side factors, infrastructural facilities and socio-demographic characteristics. Proximity to markets and social norms of the village, proxied by high literacy rates and sex ratios, play important roles in credit uptake from SHGs. However, the absence of financial access points, such as commercial or cooperative bank branches, is not prohibitive.

Keywords: Micro-finance; Joint liability lending; Informal credit (search for similar items in EconPapers)
JEL-codes: G21 G23 G28 O16 O17 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10693-023-00416-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jfsres:v:66:y:2024:i:1:d:10.1007_s10693-023-00416-4

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10693

DOI: 10.1007/s10693-023-00416-4

Access Statistics for this article

Journal of Financial Services Research is currently edited by Haluk Unal

More articles in Journal of Financial Services Research from Springer, Western Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().