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Innovative strategies devised by Indian microfinance institutions to achieve cost efficiency

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  • Nadiya Marakkath

Abstract

This study is a discussion on the ‘Non-Governmental Organization-Microfinance Institution Partnership Model’ and ‘Securitization Model’ used by Indian microfinance institutions to achieve cost efficiency. These two models are effective strategies devised and used by efficient and sustainable Indian MFIs to reduce their operating cost and financing cost. Achieving such cost efficiency is crucial for microfinance institutions to attain operational self-sustainability without levying high interest rates. Using interview method the study elicits information on these innovative strategies and recommends them to be worthy of emulation for other microfinance institutions operating in the Indian microfinance industry.

Suggested Citation

  • Nadiya Marakkath, 2012. "Innovative strategies devised by Indian microfinance institutions to achieve cost efficiency," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 1(1), pages 15-20, January.
    • Handle: RePEc:rbs:ijfbss:v:1:y:2012:i:1:id:444
    DOI: 10.20525/ijfbs.v1i1.132
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    References listed on IDEAS

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    2. Ghatak, Maitreesh, 2000. "Screening by the Company You Keep: Joint Liability Lending and the Peer Selection Effect," Economic Journal, Royal Economic Society, vol. 110(465), pages 601-631, July.
    3. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
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