Skip to main content

Ramanagaram financial diaries: Cash patterns and repayments of microfinance borrowers

The full text article is not available for purchase.

The publisher only permits individual articles to be downloaded by subscribers.

Abstract:

Using three months of data from financial diaries tracking daily cash flows of a group of microfinance borrowers in two urban slums in Karnataka, India, we show that the burgeoning microfinance sector faces a number of constraints. These households are borrowing from multiple sources, specifically multiple MFIs. Secondly, a large fraction of each household's budget is spent servicing loans with the two largest components of budget being loan repayment and food expenditure. Finally, households are observed to recycle their debts with over 27 per cent of fresh borrowings being spent on existing debts. These households in the urban slums of Ramanagaram are organizing their lives around multiple MFI memberships, multiple group meetings in a week and numerous repayment schedules. Apart from the stress to MFI clients of managing debts of small amounts from various MFIs, the Indian MFI sector will have to learn to grapple with the fallout of multiple memberships.

Keywords: INDIA; KARNATAKA; MICROFINANCE; MULTIPLE BORROWING; URBAN POOR

Document Type: Research Article

DOI: http://dx.doi.org/10.3362/1755-1986.2010.010

Publication date: June 1, 2010

papub/edm/2010/00000021/00000002/art00003
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more