Comparison of Performance of Microfinance Institutions With Commercial Banks In India |
Microfinance in Indiahas been viewed as a development tool which would alleviate poverty and enhancegrowth of the country through financial inclusion. India is a country which hasthe highest number of households which are excluded from banking. The aim ofthe paper is to study the performance and efficiency of microfinance. A sampleof microfinance institutions in India have been selected based on their ratingsgiven by microfinance information exchange for the study. A microfinance institution is measured forfinancial sustainability based on its good financial accounts and therecognized accounting practices they follow according to Meyer (2002). Thefinancial parameters of these MFIs are studied and compared with the financialparameters of commercial banks and their financial performance can be analyzed.The various parameters taken for analyzing the financial performance of MFIsand banks include: Financial structure, Profitability and Efficiency.