Factors influencing economic well-being of MFI clients in Delhi's slums
Keywords:
microfinance institutions, economic well-being, household consumption expenditure, loan utilizationAbstract
The provision of microcredit can be a highly effective tool for enhancing the economic well-being of participants. This paper aims to explore the factors impacting the welfare of microfinance institution (MFI) clients residing in the slums of Delhi where MFIs operate. The broad welfare indicator used is households' (HHs) monthly per capita consumption expenditure (MPCE). The empirical analysis relies on primary data obtained from 215 households, who were clients of microfinance institutions. The OLS regression model has been employed to identify the impact of MFI loans, loan utilization, and HH's socio-economic factors on their 'current' MPCE. The findings indicate that microfinance operations positively impact the economic well-being (MPCE) of participants. The benefits to the households grow as the loan amount increases, the duration of their relationship with MFIs lengthens, and when loans are utilized for productive purposes.
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