OUTREACH AND FINANCIAL INCLUSION IN KRISHNAGIRI: DETERMINANTS OF MICROFINANCE - AN ECONOMETRIC APPROACH
DOI:
https://doi.org/10.29121/shodhkosh.v5.i6.2024.3228Keywords:
Microfinane, Financial Inclusion, Econometric Analysis, Krishnagiri, Rural Development, Financial LiteracyAbstract [English]
This research paper delves into the role of microfinance in fostering financial inclusion in Krishnagiri, a district in Tamil Nadu, India. The primary objective was to investigate the determinants of microfinance effectiveness in enhancing financial inclusion in a rural context. Employing an econometric approach, the study utilized data collected from September to December 2023 through surveys of 500 microfinance beneficiaries in Krishnagiri. Key variables included loan amount, interest rate, repayment period, financial training, access to credit, and savings behavior. The data was analyzed using multiple linear regression models facilitated by Stata 16 software.The findings revealed a positive correlation between loan amount and access to credit, but a less significant relationship with savings behavior, suggesting that larger loans enhance credit access but do not necessarily promote savings. A negative correlation was observed between interest rates and access to credit, indicating that higher interest rates may hinder financial inclusion. Extended repayment periods positively influenced both credit access and savings behavior, highlighting the importance of flexible repayment terms. Significantly, financial training strongly impacted both access to credit and savings behavior, underscoring the critical role of financial literacy in financial inclusion.These results suggest that microfinance initiatives in Krishnagiri should not only focus on financial service provision but also on improving financial literacy and creating conducive repayment conditions. The study contributes to a nuanced understanding of microfinance impacts, offering insights for more effective financial inclusion strategies in rural areas.
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