A Study on Loan Delinquency of the Self Help Group-Bank Linkage Programme in Rural Rajasthan
and | Dec 09, 2023
Published Online: Dec 09, 2023
Page range: 86 - 101
Received: May 23, 2023
Accepted: Aug 10, 2023
DOI: https://doi.org/10.2478/foli-2023-0020
Keywords
© 2023 Deepali Bhatnagar et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.
Research background
Providing the microfinance to rural women is the prime concern of the government at central and state level in which the best microfinance programme is the Self Help Group Bank Linkage Programme. However, the Delinquency rate of the SHGBLP loan is on the higher side. As, borrowers do not make their loan repayments on time.
Purpose
The purpose of this research is to examine which types of self-help groups make timely repayments of an old loan. Also, to find out the different aspects of the loan delinquency rate which affect them and to find out the impact of self-help group maturity on loan repayment.
Research methodology
For this a total of 300 members were selected from the Udaipur and Banswara district of Rajasthan. Further, Tobit Regression has been applied to find out the factors which affect the loan delinquency percentages in the Self Help Group Bank Linkage Programme.
Results
The results highlighted that the maturity of the SHG group affects their repayment performance as old SHGs are functioning well in terms of repayment. The reason for the high delinquency rate is that the members had no surplus Income to repay back because of the failure of Business, natural calamities and medical issues. The members who are repaying the loan back on time are giving from their agriculture and enterprise profits.
Novelty
A lot of research has been carried out on the Impact of SHGBLP on many other factors but there is no research that has been done to find out why the programme has high loan delinquencies after being the best together with the impactful microfinance programme.