Performance and Sustainability of Microfinance Institutions in India

Microfinance in India has been viewed as a development tool which would alleviate poverty and enhance growth of the country through financial inclusion. A large number of households are excluded from banking and financial services. With the Andhra crisis of MFI's and issues that MFI's have a mission drift, the aim is to study the performance and efficiency of microfinance institutions and its contribution to the Indian economy. The role of commercial banks in bringing about financial inclusion is also studied. A sample of MFI in India have been selected based on their ratings given by microfinance information exchange (MIX) for the study. The performance of these sample MFIs as well as their performance with respect to commercial banks in India have been studied using statistically tools. Based on the analysis, the performance of MFI's & their impact on financial inclusion is studied in this research paper.