MicroSave India Focus Note 34
2 Pages Posted: 6 Mar 2010
Date Written: February 2010
Many Indian microfinance institutions (MFIs) introduced the individual lending (IL) methodology as a natural progression from the group lending methodology. The lure of "big ticket" loans and higher profitability is attracting growth oriented MFIs to aggressively push for IL without considering the inherent risks. IL has its own idiosyncratic needs like cash flow based lending; analysing business needs and risks; bringing flexibility in product features; building staff capacities and processes that must be followed for successful implementation. This India Focus Notes (IFN) examines these issues and makes recommendations for MFIs considering individual lending.
Keywords: Microfinance, Risks, Individual Lending, India
JEL Classification: R
Suggested Citation: Suggested Citation
Ravi Kumar, T.V.S. and N.A., Venkata and Panikkal, Sandeep, Risks and Challenges in Individual Lending for Indian Micro-Finance Institutions (February 2010). MicroSave India Focus Note 34. Available at SSRN: https://ssrn.com/abstract=1562606 or http://dx.doi.org/10.2139/ssrn.1562606