Micro finance institutions operate in the Indian economy with the ultimate objective to serve the financially poor section of the society. This is done by providing them with financial support and credit services (Lyuirika, 2010). However, their objective of financial stability and their long term viability can’t be overlooked. Very often, the task of managing both the purposes becomes a bothered grindstone for such Micro Finance Institutions. The reason behind the same lies in the fact that the unprivileged section, to whom the loans are provided, lacks a stable income to provide the collateral to the loan amount. Many a times, to fulfill the objective of generating regular cash flows in the institution, proper credit risk analysis is total ignored.
In the recent time the recession in the real estate sector has become one of the most interested topic among the researchers. According to market experts the bubble in the real estate sector has burst. The prices of the real estate has decreased rapidly. Similarly the gap between the supply and demand has increased significantly in recent times (KPMG, 2014). Read more »
Owing to the increase in the economic development and growing Gross Domestic Product (GDP) of India, there is an increasing demand for financial assistance, especially in microfinance. This demand is not only from corporations and financially stronger groups but also from the lower sections of the society. The delivery of financial services to lower sections of the society is called financial inclusion. Most commercial banks in the country cater to the financial needs of people. The poor section of the society is deprived of financial assistance due to the absence of collateral/ financial security. For meeting the requirements of this segment, microfinance institutions (MFIs) were set up that acted as a provider for the underprivileged section of the society. Read more »
In the previous article, the author reviewed the need for credit risk management in microfinance institutions. Small scale microfinance institutions constitute a sizeable chunk of the entire microfinance industry in India. Owing to the large amount of credit risk faced by microfinance institutions today, the numbers of approaches and techniques have been devised by them in order to mitigate the risk pertaining to the failure of repayment by the customers. Read more »
As seen in the previous context, announcement of the instituting ‘Islamic banking system’ by the Indian government has garnered nation-wide interest in recent months. The article primarily focusses on the socio-economic development and in promoting egalitarianism or Islamic banking in India. Read more »
Micro finance institutions operate in the economy with the ultimate objective to serve the financially poor section of the society, by providing them with financial support and credit services (Luyirika, 2010). However, their objective of financial stability and their long term viability can’t be overlooked. Very often, the task of managing both the purposes becomes a bothered grindstone for such micro finance institutions. Read more »
Over the past many years, several initiatives have been undertaken by the Indian government and Reserve Bank of India (RBI) to introduce Islamic banking in India. In 2010 and after 34 years, Indian Prime Minister visited Saudi Arabia, which is one of the major investor in Islamic banking (Kumar 2016). Similarly the recent visit of Indian Prime Minister in 2016 has helped to develop bilateral relationship between the two countries. Demographically, many Indians living in the Gulf will garner interest from the introduction of Islamic banking. Read more »
Income is considered as one of the factors to determine success in life (Liu, Kuo, He, & Liu, 2006). Banks often rely on models which predict credit risk to decide whether to lend to a loan seeker (Junjie Liang, 2011). Any event, which is subjected to uncertainty, is predicted through actuarial models. Read more »