Ecosystem, Competition and Regulation in Indian Microfinance Industry:An Inquiry into Causes, Consequences & Sustainability

Access to institutional finance to the disadvantaged groups has remained a challenge for society, government, policy makers, regulators, donors and NGOs for ages. Microfinance has emerged as a promising way to provide this access to the disadvantaged groups and further the objective of financial inclusion and sustainable development. The MFIs working in this industry are still grappling with their own challenges and trade-offs. But this industry still continues to attract new MFIs, who come up with innovative product and service offerings so as to tap a vast untapped clientele base. The broad objective of this study is to examine the nature and consequences of competition and regulatory intervention in the Indian microf inance industry space where the players are struggling with information asymmetry and the presence of diversified institutional objectives. The study is a blend of exploratory, descriptive and causal methodologies, where both qualitative and quantitative data are used to achieve the stated objectives in this dissertation. Empirical examination is based on secondary data which has been obtained from diverse sources. Apart from the MIX market database, which is the major source of data for this study, I have also gathered data from diversified literatures, reports and news clips.