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Growth and distribution of microfinance in India: A panel data analysis

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  • S. SARAVANAN

    (Madras School of Economics, Chennai, India)

  • Devi Prasad DASH

    (Indian Institute of Technology, Ropar, India)

Abstract

This paper analyses large panel of Self-Help Group (SHG) financing across 30 Indian states over the period 2007 to 2015. Classifying the panel across four different bank based on financing, we find a significant and positive association of both outstanding loan and savings of SHGs to that of bank financing across the states. Applying panel regression frameworks of both time varying and state specific fixed effects, we have obtained positive association between outstanding loans, savings rate of SHGs to that of bank loans. Our panel model has further confirmed that increases in the number of SHGs have positively influenced the bank loans particularly from public and private sectors over the years. The results thus suggest that financial inclusion drive in India has made financial institutions across the sectors to extend loan for small sector initiatives.

Suggested Citation

  • S. SARAVANAN & Devi Prasad DASH, 2017. "Growth and distribution of microfinance in India: A panel data analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 127-146, Spring.
    • Handle: RePEc:agr:journl:v:xxiv:y:2017:i:1(610):p:127-146
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    References listed on IDEAS

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