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The Deluge of debt: Under-standing the financial needs of poor households


  • B.S. Suran

    (Centre for Development Studies)

  • D. Narayana

    (Centre for Development Studies)


This 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.

Suggested Citation

  • B.S. Suran & D. Narayana, 2009. "The Deluge of debt: Under-standing the financial needs of poor households," Centre for Development Studies, Trivendrum Working Papers 412, Centre for Development Studies, Trivendrum, India.
  • Handle: RePEc:ind:cdswpp:412

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    References listed on IDEAS

    1. Parhi Smita & Sriram M S, 2004. "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.
    2. 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.
    3. Navaneetham K & M Kabir & C S Krishnakumar, 2009. "Morbidity Patterns In Kerala: Levels and Determinants," Working Papers id:2176, eSocialSciences.
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    More about this item


    Poor households; Financial inclusion; SHG; Kerala; Moneylender;

    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


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