The Microfinance Review

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Analysis of Key Barriers to Growth of Microfinance Institutions:An Approach Based on Interpretive Structural Modelling


Affiliations
1 School of Management, IMS Unison University, Dehradun (UK), India
     

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The microfinance institutions (MFIs) experienced vibrant growth in the last few decades, but its sustainability remains a major area of concern. The present research analyses the barriers to achieve sustainable growth of MFIs by identifying the most dominating barrier. The study has been divided into two parts, namely, identification of barriers and analysis. The identification phase led to the selection of 34 barriers from existing literature and consultation with experts. The Interpretive Structural Modeling (ISM) analysis was used to understand the impact and linkage of identified barriers. ISM has 11 levels in designing a model. Further, the barriers are classified into four major categories on the basis of their driving and dependence powers using MICMAC. After the study, 13 barriers were identified as the most important ones for sustainability of an MFI. The findings will aid policy makers to achieve goals of financial inclusion with the support of MFIs.

Keywords

Interpretive Structural Modeling, Micro Finance Institutions.
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  • Analysis of Key Barriers to Growth of Microfinance Institutions:An Approach Based on Interpretive Structural Modelling

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Authors

Santosh Kumar
School of Management, IMS Unison University, Dehradun (UK), India

Abstract


The microfinance institutions (MFIs) experienced vibrant growth in the last few decades, but its sustainability remains a major area of concern. The present research analyses the barriers to achieve sustainable growth of MFIs by identifying the most dominating barrier. The study has been divided into two parts, namely, identification of barriers and analysis. The identification phase led to the selection of 34 barriers from existing literature and consultation with experts. The Interpretive Structural Modeling (ISM) analysis was used to understand the impact and linkage of identified barriers. ISM has 11 levels in designing a model. Further, the barriers are classified into four major categories on the basis of their driving and dependence powers using MICMAC. After the study, 13 barriers were identified as the most important ones for sustainability of an MFI. The findings will aid policy makers to achieve goals of financial inclusion with the support of MFIs.

Keywords


Interpretive Structural Modeling, Micro Finance Institutions.

References