Utilization and Economics of Microfinance Under Self-help Groups: A Micro-Level Analysis from Tripura

Abstract

The present study was conducted in Tripura state during 2020-21 to determine the impact of microfinance through SHG. A multistage stratified random sampling technique was used to select the SHGs, i.e. sampling unit and data collected from SHG members. Analysis of collected data using percentages, averages, ranking techniques, etc. and results indicated that vegetable production has the highest B-C ratio followed by the fishery in the small SHGs inferring that fishery and vegetable cultivation were more profitable than other enterprises. Results also showed that the highest amount of credit was utilized in the fishery. It was observed that insufficient amounts of loans, complex procedures of loaning, high cost of inputs, delay in loan disbursement, lack of marketing facilities, and inadequate knowledge of potential funding sources were the major problems in microfinancing through SHGs. Nevertheless, SHGs connected a very large section of poor households with banks, who otherwise remain out of reach from the conventional banking system.