Loan demand by microfinance borrowers

Abstract

Purpose The purpose of this paper is to explore what determines the loan size/demand in a micro-finance group and makes comparative account of self-help groups and joint liability groups. Design/methodology/approach Using primary data and carried out survey (questionnaire and focus group discussion) for data collection. While for econometrics OLS regression has been used. Findings The study finds that employment, landownership and years spent by members in group has positive impact on loan demand by micro finance borrowers. Research limitations/implications This study points out the fact that economic variables along with group characteristics has positive implication on loan demand by borrowers. Practical implications This study would propel further research in group dynamics in micro-finance area. Social implications This study attempts to bring out the fact that economic position of micro-finance members along with its group status has bearing on its loan demand position. Originality/value The authors conducted this study using primary data, and all the collected data and study bring out the fact that older membership in groups are positive for loan demand by borrowers.