Group lending through an SHG bank-linkage programme in India

Transaction Costs and Social Benefits

Bibliographic Data

ID3886595
AuthorsMeenakshi Rajeev (0000-0001-6326-1046, Meenakshi Academy of Higher Education and Research, corresponding author), B P Vani, Veerashekharappa, Veerashekharappa Veerashekharappa
Year2020
Volume30
Issue2
Pages168-181
Publication date2020-02-17
Open AccessNo
TypeARTICLE
VenueDevelopment in Practice (JOURNAL)
Journal identifiersISSN: 0961-4524 • E-ISSN: 1364-9213
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09614524.2018.1508418
OpenAlexW2968424840
LanguageEN
Citations received2
References cited8

Group lending is useful in channelling credit to the self-employed poor in developing countries, to whom banks usually prefer not to lend, and formation of self-help groups (SHGs) helps facilitate this. In India, SHGs can access credit through private microfinance organisations or can approach banks through a state-led bank-linkage programme. Scholars argue that transaction costs are high while borrowing from banks despite relatively lower interest rates, making this uneconomical. This article uses a field survey to estimate transaction costs, presents other social benefits of the programme, and finds empirical justifications for strengthening the bank-linkage programme

Business · Database transaction · Economic growth · Economics · Microfinance · Transaction cost · FinTech, Crowdfunding, Digital Finance · Islamic Finance and Banking Studies · Microfinance and Financial Inclusion · Finance

Tools

Open DOISci-Hub