The Deluge of debt: Under-standing the financial needs of poor households
AbstractThis paper is about the financial lives of poor households. It examines the different sources of income and expenditure of the poor households residing in a coastal settlement in Kerala. The method of financial diary for data collection is adopted for the study. The sample size is 13. The study finds that more than 50 of the poor households in the socially excluded hamlet are not yet connected with the formal institutionalised system for their financial needs. The poor frequently borrow small amounts from money lenders, friends and relatives even though about 46 of the households had access to SHG [Self Help Groups] or bank linkages. In the sample households, the maximum amounts of over 72 of such loans were less than Rs 500. Debt or borrowed funds constituted about 47 of the resource inflow for the sampled households. The share of food in the expenditure basket of the poor was very high, regardless of the occupation and the source of livelihood of the household. The paper suggests the need for a relook at the design of financial products that banks offer to these underserved, vulnerable clients. The paper also urges more research in the area, and also a clear client consultation process before designing financial products for the poor.
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Bibliographic InfoPaper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 412.
Length: 37 pages
Date of creation: Jul 2009
Date of revision:
Poor households; Financial inclusion; SHG; Kerala; Moneylender;
Find related papers by JEL classification:
- G2 - Financial Economics - - Financial Institutions and Services
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Parhi Smita & Sriram M S, . "Financial Status of Rural Poor: A Study in Udaipur District," IIMA Working Papers WP2004-02-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
- Navaneetham K & M Kabir & C S Krishnakumar, 2009.
"Morbidity Patterns In Kerala: Levels and Determinants,"
- K. Navaneetham & M.Kabir & C.S Krishnakumar, 2009. "Morbidity patterns in Kerala: Levels and determinants," Centre for Development Studies, Trivendrum Working Papers 411, Centre for Development Studies, Trivendrum, India.
- Orlanda Ruthven, 2002. "Money mosaics: financial choice and strategy in a West Delhi squatter settlement," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(2), pages 249-271.
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