Analysis of Rural Microfinance Sustainability: Does Local Insight Driven Governance Work?

Abstract

This study aims to create sustainable microfinance models and formulate policies to facilitate finance in rural areas of western Rajasthan. The study gathers the data by distributing questionnaires to 480 respondents from chosen districts Pali, Sirohi, and Jalore. The information from the questionnaires is supplemented by focus groups held in certain places. This study's endogenous variables are microfinance sustainability and governance characteristics. Social, economic, and environmental issues are exogenous variables. Then, we quantitatively analyze the data using Smart-PLS 4.0. The study found a significant association between social, economic, governance, environmental, and sustainable microfinance. Microfinance sustainability can offer several rewards to managers, including financial stability, effective risk management, enhanced reputation, increased impact, and competitive advantage. The study's outcome can help managers achieve their social and environmental objectives and create long-term benefits for borrowers and communities.