Comparative analysis of Microfinance by Microfinance Institutions and other Financial Institutions in Bhagalpur district, Bihar
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Date
2010-07-10
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UNIVERSITY OF AGRICULTURAL SCIENCES GKVK, BENGALURU
Abstract
Micro-finance programmes in the recent past have become one of the most promising ways to use scarce development funds to achieve the objectives of poverty alleviation. An attempt has been made in this study to know the microfinance facilities extended to borrowers along with patterns of disbursement, monitoring and recovery of loans by different financial institutions. The study also attempts to analyze the economic impact of loan on borrowers and the constraints faced by borrowers in borrowing and. repayments. The study is based on the primary data collected from four micro financial institutions (MFI), four non micro financial institutions (NMFI), and fifty beneficiaries of both institutions in Bhagalpur district, Bihar. The syudy was undertaken during 2009-10. Measure of central tendency and dispersion, paired ‘t’ test and Garrets ranking technique were employed to analyse the data. MFI were providing only micro credit and insurance facilities to the beneficiaries, but NMFI were providing micro credit, insurance, savings accounts, money transfer facility. MFI were providing micro credit directly to the beneficiaries where as NMFI were providing micro credit though bank. Frequency of monitoring in case of MFI was either monthly or once at the time of loan sanctioning where as NMFI monitors the loan use quarterly or whenever required. The beneficiaries of MFI have to repay the loan in weekly installment, where as beneficiaries of NMFI have to repay the loan in month wise. The increase in monthly income, savings, expenditure on food and health of the beneficiaries of MFI was marginally higher than that of NMFI. The beneficiaries of MFI felt that, high repayment pressure was the main constraint faced by borrowers in availing the loan but beneficiaries of NMFI felt, more paper work was the major constraint.
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