Research Paper
Year: 2019 | Month: July | Volume: 6 | Issue: 7 | Pages: 283-294
Performance of MFIs in India Post Andhra Pradesh Ordinance
Gopalakrishnan Kannan1, Dr. K P Saraswathy Amma2
1Associate Vice President, Standard Chartered Bank Global Business Services #1/364, Old Mahabalipuram Road, Padur, Chennai - 603103
2Professor, Fisat Business School, Hormis Nagar, Mookkannoor, Angamaly, Ernakulam District, Kerala – 683577
Corresponding Author: Gopalakrishnan Kannan
ABSTRACT
We evaluate the performance of Microfinance Institutions (MFIs) in India by analysing select data for a 7-year period from 2011-12 to 2017-18. The effects of AP ordinance (2010), the RBI circular regulating MFIs (2011) and the demonetisation done by the Government of India (2016) on the performance of the MFIs in India are evaluated. The analysis shows that the Indian MFIs’ performances have improved manifold over this 7-year period across most parameters. MFIs have done well not only on their social objectives and financial sustainability but also on operational efficiency and risk management parameters. There is, however, a drop in their performance in some parameters post demonetisation in 2016-17. This drop seems to be temporary as the parameters that saw a drop like the number of borrowers, ROE and PAR 30 days have improved in 2017-18.
Key words: MFI, AP Ordinance, performance, demonetization
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