Does repayment indicate the success of micro-finance programme

Abstract

This paper examines the patterns of loan utilisation and repayment among microfinance group members of Wayanad district of Kerala. It argues that 100 per cent repayment by members need not always indicate the success of group lending. As majority of the members have not undertaken income generating activities, the fear of social sanction and repeated interactions put pressure on them to depend on micro-finance loans at the time of repayment. The absence of alternative credit sources increases the financial dependence of the members over a period of their stay in micro-finance programme.