Regulatory non-compliances in microfinance operations: a survey of Indian microfinance institutions

Abstract

PurposeRegulation is critical for sustainable microfinance sector growth. Under this premise, the study aims to examine the different regulatory noncompliance (RNC) practices prevalent in the operations of microfinance institutions (MFIs) at the ground level.Design/methodology/approachBoth the quantitative and qualitative (observations, interviews and focus group discussions) techniques are used to extract the findings.FindingsThe study highlights the different RNC practices exercised by the loan officers at the field level in their microfinance loan disbursements.Originality/valueThis study is based on the primary data collected from microfinance clients. The arguments put forth for the RNC practices are extracted from direct personal interviews with the loan officers and the clients. The role of various dilemmas/circumstances of the loan officers and the beneficiaries that implicate the MFIs in RNC is highlighted.