Loan Repayment Dynamics of Self-help Groups in India

Abstract

The overall ratio of non-performing assets (NPAs) to total advances (the NPA ratio) extended to self-help groups (SHGs) has historically remained below 8 per cent in India. However, in the central, northern, and north-eastern regions of India, this ratio is relatively high and has remained above 15 per cent since 2015–2016. Using state-level data, the study identifies SHG-specific and state-specific factors that might be responsible for higher NPAs ratios. It also examines whether higher NPAs constrain access to future credit. Spatial analysis confirms the existence of geographical clustering of NPAs in the northern and central regions of the country. SHGs with lower outstanding loans and lower savings are more likely to default, the relationship being stronger in states with higher NPAs. The article finds that states with higher SHGs densities, per capita incomes, and road and railway connectivity, and lower infant mortality rates have lower NPAs in their SHGs. SHGs with lower savings and higher NPAs operating in states with lower per capita incomes and banking penetration face difficulties accessing fresh credits. JEL Codes: G21, O18, R51

Self Help Groups Members’ Religious Perception and their Relationship between Financial Literacy and Repayment Intention towards Loan: Considerable Focus on Himachal Pradesh (H.P)

“…It is noteworthy that a majority of these individuals live in developing economies. According to Manu (2022), SHGs are instrumental in the development and empowerment of their members. Financial literacy is identified as a critical factor in facilitating this process (Husain & Dutta, 2013).…”

Livelihood Grants and the Case of Ultra-Poor Women Households in Bihar, India

“…1.In the Indian context, scholars like Muduli and Sharma (2022) and Sangwan and Nayak (2020) have reiterated the problem of non-performing assets (NPAs) associated with SHGs in contemporary times. In fact, there has been a clear tendency among microfinance institutions to prefer lending loans to non-poor households for non-agricultural purposes.…”