Observational analysis reveals microfinance institutions' significant loan disbursement growth, indicating their critical role in financial inclusion.
The mainstreaming of microfinance in India as a means of financial inclusion and poverty alleviation is a harmful and mostly unacknowledged obstacle to the complete financial inclusion of low-income and rural residents of India in the conventional banking system. We examine how microfinance institutions in India have grown over the last 10 years, as evidenced by changes in asset quality, loan disbursement, and savings mobilization. According to the study, which uses reference year data from NABARD reports, microfinance outreach is expanding rapidly. Savings have nearly doubled, and loan disbursements have climbed from ₹24.01 lakhs crore in 2013–14 to ₹145.20 lakhs crore in 2022–23, at a compound annual growth rate of more than 21%. Thanks to legislative support and digital innovation, the industry demonstrated resilience during COVID-19. The sector's maturity is further demonstrated by the decline in non-performing assets and the growing influence of Self Help Groups (SHGs). The findings further highlight the significance of MFIs for inclusive growth in the face of sustainability and regional inequality issues.
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Dama Maheswari (2025) studied this question.
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