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Patterns of Access to Microfinance Loans in India

Kanika Rana and Brinda Viswanathan

Review of Development and Change, 2019, vol. 24, issue 2, 259-279

Abstract: Abstract Due to various supply and demand factors, households in developing countries may borrow from a single source or combination of sources—formal, informal and microfinance institutions (MFI). Who is accessing what types of loan sources? This study uses Indian Human Development Survey (2011–2012) to analyse, for the first time, households accessing microfinance loans either alone (8%) or in combination with other sources (13%). We find that the more developed southern states have the highest MFI-linked borrowers (39%). Despite the low overall share of MFI borrowing, microfinance supports inclusiveness with higher presence among the economically disadvantaged and socially underprivileged, such as female-headed, casual labour, Other Backward Classes and dalit households. Expectedly, the effects of social networking are more pronounced among MFI-linked borrowers.

Keywords: Microfinance; household borrowing; credit sources; financial inclusion; social networks (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1177/0972266119886677

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