Growth of Non- Performing Assets in Microfinance Institutions: An evidence from India

Abstract

The evolution of Grameen Bank in Bangladesh helped in the beginning of new era in the industry of microfinance. There are various models under microfinance have been developed so far and one of them is Microfinance Institutions which are the institutions working towards providing finance related services to the people who are deprived from it or find it difficult to receive funds from other sources in order to raise their income levels and improve living standards. MFIs are working towards the demands of financial services and products to meet the consumption and micro-enterprise demands of the poor and rural people. The purpose of the study is to investigate the major trend of nonperforming assets in Microfinance Institutions in India with special reference to the State of Bihar. The research problems include the areas where it is important to understand the prevailing growth trend of NPAs in MFIs and its remedial measures in the long run. The trend of growth in NPAs in Microfinance Institutions working in Bihar has been taken into consideration for rectifying the current norms and conditions of lending which forms the basis of related problems. There are various issues related to the sector of microfinance and MFIs has come up with large number of financial products and services for the people who cannot afford the services from formal financial institutions. Therefore it is important to analyze the progress of such institutions working towards the development of poor and rural people.