This document discusses factors that affect the financial sustainability of microfinance institutions (MFIs). It begins with background on microfinance programs and defines financial sustainability. The study aims to identify factors influencing MFI financial sustainability and develop a financial sustainability index. Regression analysis of MFI data from India and Bangladesh found that capital/asset ratio, operating expenses/loan portfolio, and portfolio at risk >30 days influence sustainability. The document proposes a financial sustainability index model based on these factors and operational self-sufficiency, assigning weights based on various agencies' use of the indicators. The model converts indicator data to a common scale to calculate total standard scores as a sustainability index.
Sustainability of Microfinance: A Case of Tea SACCOs in Kericho, Buret and Bo...World-Academic Journal
Tea SACCOs are tea based rural SACCOs formed by tea growers, whose functions are to keep member’s savings in form of shares, savings accounts and deposit accounts among others. Little is known about the factors influencing financial sustainability of Tea SACCOs. The study covered all six Tea SACCOs in Kericho, Bomet and Buret districts in the Rift valley province of Kenya. Analysis involved evaluating growth in net worth, administrative efficiency, loan portfolio quality, staff productivity and transaction costs. The study found that the growth of net assets had been on the decline over the years, loan portfolio was poor and default rates were high. According to the indicators evaluated, Tea SACCOs had not yet reached their full potential in outreach and that high transaction costs hindered their financial sustainability.
MODELLING THE PREDICTION OF FARMERS' LOAN REPAYMENT IN PRIMARY AGRICUTURAL CO...IAEME Publication
Money, the vital element of economy, is indispensable to Agriculturists too. In India the farming community is subject to various vagaries to continue to be farmers and boost GDP of our Nation. In this Co-operative banks also play an important role despite the low percentage of repayment by farmers promptly coupled with high level of pressure for farmers for loan for continuing agricultural activities while the resource is requiring its cost to make it readily available at the time of all farming activities. There are many socio psychological factors. Affecting recovery of lending institutions resulting in a hard situation for credit societies and banks to continue lending. Here the study is on factors that could predict ways and means of recovery from farmers.
Influence of External Equity Financing on Growth of Craft Micro Enterprises i...paperpublications3
Abstract: Micro enterprises together with small and medium enterprises provide employment and income to many people in Kenya. The main objective of the study was to establish the influence of external equity financing on growth of craft micro enterprises in Kenya. The target population for the study constituted all the 2334 craft micro enterprises. The sample frame constituted all the soapstone micro enterprises operating within Tabaka Town and all the woodcarving micro enterprises registered by Wote Town Council. The study used a sample of 330 craft micro enterprises drawn using stratified sampling technique. Data were gathered data using a semi-structured questionnaire after testing it for reliability and validity, and then analyzed by use of descriptive and inferential type of statistics. The ANOVA and multiple regression analysis were used to analyze the data. The findings of the study revealed that, external equity financing (p-value 0.000) has a significant influence on the growth of craft microenterprises. The study recommended that the government should sensitize and encourage the entrepreneurs on to use funds from friends and family members since these are cheap sources because they do not attract interests.
Keywords: Craft, External equity, Financing, Growth, Microenterprise, Tabaka.
Title: Influence of External Equity Financing on Growth of Craft Micro Enterprises in Kenya
Author: Steve Ondieki Nyanamba, Dr. Florence Sigara Memba, Dr. Willy Mwangi Muturi, Electrin Teresa Maswari
ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Paper Publications
Influence of Cooperative Credit on Cassava Production in Anambra State, NigeriaYogeshIJTSRD
The study analyzed the influence of cooperative credit on cassava production. A multi stage sampling technique was used to select 120 respondents in the study area and structured questionnaire was administered for data collection. Descriptive statistics was used to analyze the socio economic characteristics of the respondents while multiple regressions using exponential form was used to quantitatively determine the influence of credit obtained and utilized on cassava output. It showed that 36.7 of the respondents were above 60 years of age which can be grouped as aged this revealed that majority of the farmers there are within their prime age and can utilize credit obtained effectively and efficiently. 76.7 of these farmers were males while the remaining 23.3 were females, majority of the respondents were married and 84.2 of them had formal education. Average amount requested by the farmers was N212, 600,000 but N185, 725,000 was approved this shows that the farmers in that location are small scale farmers which they need to upgrade to large scale in order to produce in large quantity and have durable profit. Influence of credit on cassava output showed that 89.7 of the regression was explained by the regessors. The result revealed that the farming experience with credit use, interest rate charged, total expenditure on production, and loan repayment period were the major significant that influence cassava output. Also, the hypothesis results revealed that credit obtained and utilized had significance influence on cassava output. And concluded that cassava production in the study area is worthwhile embarking on and that credit enhances the farmer’s production, which was reflected in their cassava output. Therefore recommended that credit institutions or lending agencies should lend money to the small scale farmers to improve their productivity, financial institutions in the country should see to the smooth spending of the credit received to avoid diversion of credit. Nwafor, Grace Obiageli | Umebali, Emmanuel E. "Influence of Cooperative Credit on Cassava Production in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd43931.pdf Paper URL: https://www.ijtsrd.com/management/other/43931/influence-of-cooperative-credit-on-cassava-production-in-anambra-state-nigeria/nwafor-grace-obiageli
“Financial Inclusion in SHG-bank Linkage Model under SGSY with special refere...iosrjce
Financial Inclusion is a very big challenge to banking sector. Till now most of the banking facilities
are not reaching to deprive. Micro financing through SHGs is a vital weapon for poverty eradication. But due to
lack of uniformity it is not complete its target efficiently. In this paper try to focus on the financial inclusion in
SHGs-Bank Linkage Programme under SGSY scheme in Jhansi district. SBLP is the banking link with poors to
uplift their socio-economoc, health, nutrition, insurance, saving, education aspects. It is an attempt to clarify
how much this programme reach to beneficiaries of SHGs.
The present study differs from previous studies as it is focused its basic cause for reduction in quality numbers
of SHGs come out after complete all stages. Further, this paper tries to access the grass root issues relating to
SHGs and the normal course in decrease the number of SHGs at last stage in the study area. The study is
undertaken in four development blocks of jhansi Districts of Uttar Pradesh during 2009-13. It is observed that
due to fast growing of the SHG-bank linkage programme, quality credit linked SHG has not cover all stages of
the programme.. Some of the factors affecting the decline of SHGs are the target oriented approach of the
government in preparing group, inadequate incentive to NGO’s for nurturing their groups etc.
Sustainability of Microfinance: A Case of Tea SACCOs in Kericho, Buret and Bo...World-Academic Journal
Tea SACCOs are tea based rural SACCOs formed by tea growers, whose functions are to keep member’s savings in form of shares, savings accounts and deposit accounts among others. Little is known about the factors influencing financial sustainability of Tea SACCOs. The study covered all six Tea SACCOs in Kericho, Bomet and Buret districts in the Rift valley province of Kenya. Analysis involved evaluating growth in net worth, administrative efficiency, loan portfolio quality, staff productivity and transaction costs. The study found that the growth of net assets had been on the decline over the years, loan portfolio was poor and default rates were high. According to the indicators evaluated, Tea SACCOs had not yet reached their full potential in outreach and that high transaction costs hindered their financial sustainability.
MODELLING THE PREDICTION OF FARMERS' LOAN REPAYMENT IN PRIMARY AGRICUTURAL CO...IAEME Publication
Money, the vital element of economy, is indispensable to Agriculturists too. In India the farming community is subject to various vagaries to continue to be farmers and boost GDP of our Nation. In this Co-operative banks also play an important role despite the low percentage of repayment by farmers promptly coupled with high level of pressure for farmers for loan for continuing agricultural activities while the resource is requiring its cost to make it readily available at the time of all farming activities. There are many socio psychological factors. Affecting recovery of lending institutions resulting in a hard situation for credit societies and banks to continue lending. Here the study is on factors that could predict ways and means of recovery from farmers.
Influence of External Equity Financing on Growth of Craft Micro Enterprises i...paperpublications3
Abstract: Micro enterprises together with small and medium enterprises provide employment and income to many people in Kenya. The main objective of the study was to establish the influence of external equity financing on growth of craft micro enterprises in Kenya. The target population for the study constituted all the 2334 craft micro enterprises. The sample frame constituted all the soapstone micro enterprises operating within Tabaka Town and all the woodcarving micro enterprises registered by Wote Town Council. The study used a sample of 330 craft micro enterprises drawn using stratified sampling technique. Data were gathered data using a semi-structured questionnaire after testing it for reliability and validity, and then analyzed by use of descriptive and inferential type of statistics. The ANOVA and multiple regression analysis were used to analyze the data. The findings of the study revealed that, external equity financing (p-value 0.000) has a significant influence on the growth of craft microenterprises. The study recommended that the government should sensitize and encourage the entrepreneurs on to use funds from friends and family members since these are cheap sources because they do not attract interests.
Keywords: Craft, External equity, Financing, Growth, Microenterprise, Tabaka.
Title: Influence of External Equity Financing on Growth of Craft Micro Enterprises in Kenya
Author: Steve Ondieki Nyanamba, Dr. Florence Sigara Memba, Dr. Willy Mwangi Muturi, Electrin Teresa Maswari
ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Paper Publications
Influence of Cooperative Credit on Cassava Production in Anambra State, NigeriaYogeshIJTSRD
The study analyzed the influence of cooperative credit on cassava production. A multi stage sampling technique was used to select 120 respondents in the study area and structured questionnaire was administered for data collection. Descriptive statistics was used to analyze the socio economic characteristics of the respondents while multiple regressions using exponential form was used to quantitatively determine the influence of credit obtained and utilized on cassava output. It showed that 36.7 of the respondents were above 60 years of age which can be grouped as aged this revealed that majority of the farmers there are within their prime age and can utilize credit obtained effectively and efficiently. 76.7 of these farmers were males while the remaining 23.3 were females, majority of the respondents were married and 84.2 of them had formal education. Average amount requested by the farmers was N212, 600,000 but N185, 725,000 was approved this shows that the farmers in that location are small scale farmers which they need to upgrade to large scale in order to produce in large quantity and have durable profit. Influence of credit on cassava output showed that 89.7 of the regression was explained by the regessors. The result revealed that the farming experience with credit use, interest rate charged, total expenditure on production, and loan repayment period were the major significant that influence cassava output. Also, the hypothesis results revealed that credit obtained and utilized had significance influence on cassava output. And concluded that cassava production in the study area is worthwhile embarking on and that credit enhances the farmer’s production, which was reflected in their cassava output. Therefore recommended that credit institutions or lending agencies should lend money to the small scale farmers to improve their productivity, financial institutions in the country should see to the smooth spending of the credit received to avoid diversion of credit. Nwafor, Grace Obiageli | Umebali, Emmanuel E. "Influence of Cooperative Credit on Cassava Production in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd43931.pdf Paper URL: https://www.ijtsrd.com/management/other/43931/influence-of-cooperative-credit-on-cassava-production-in-anambra-state-nigeria/nwafor-grace-obiageli
“Financial Inclusion in SHG-bank Linkage Model under SGSY with special refere...iosrjce
Financial Inclusion is a very big challenge to banking sector. Till now most of the banking facilities
are not reaching to deprive. Micro financing through SHGs is a vital weapon for poverty eradication. But due to
lack of uniformity it is not complete its target efficiently. In this paper try to focus on the financial inclusion in
SHGs-Bank Linkage Programme under SGSY scheme in Jhansi district. SBLP is the banking link with poors to
uplift their socio-economoc, health, nutrition, insurance, saving, education aspects. It is an attempt to clarify
how much this programme reach to beneficiaries of SHGs.
The present study differs from previous studies as it is focused its basic cause for reduction in quality numbers
of SHGs come out after complete all stages. Further, this paper tries to access the grass root issues relating to
SHGs and the normal course in decrease the number of SHGs at last stage in the study area. The study is
undertaken in four development blocks of jhansi Districts of Uttar Pradesh during 2009-13. It is observed that
due to fast growing of the SHG-bank linkage programme, quality credit linked SHG has not cover all stages of
the programme.. Some of the factors affecting the decline of SHGs are the target oriented approach of the
government in preparing group, inadequate incentive to NGO’s for nurturing their groups etc.
Changing Issues Related to Declining of Non-Performing Assets in Banksijtsrd
This paper explores an empirical approach to the analysis of Non Performance Assets NPAs of public, private, and foreign sector banks in India. the NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. This paper aims to find the fundamental factors which impact NPAs of banks. A model consisting oftivo types of factors, viz., macroeco nomie factors and bank specific parameters, is developed arid the behavior of NPAs of the three categories of banks is observed. The empirical analysis assesses how macroeconomic factors and bank specific parameters affect NPAs of a particular category of banks. The results show that movement in NPAs over the years can be explained well by the factors considered in the model for the public and private sector banks. The other important results derived from the analysis include the finding that banks exposure to priority sector lending educes NPAs. The Impact of competitive culture of public,, private, and foreign sector banks in India with in themselves helpes in declining of NPAs from banks. Dr. Mohan S. Rode "Changing Issues Related to Declining of Non-Performing Assets in Banks" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29684.pdf Paper URL: https://www.ijtsrd.com/management/other/29684/changing-issues-related-to-declining-of-non-performing-assets-in-banks/dr-mohan-s-rode
Firm level determinants to small and medium sized enterprises’ access to fina...rrpidani
Firm Level Determinants to Small and Medium-Sized Enterprises’ Access to Financing in Indonesia by Rita Pidani and Ishak Balaka. Academy of Taiwan Business Management Review, April 2013, Volume 9, Number 1, pp. 117-126.
An Investigation into the Financial Performance of Micro, Small and Medium En...Dr. Amarjeet Singh
Micro, small and medium enterprises (MSMEs) are an indispensable part of the Indian economy. In terms of Gross Value Added (GVA) and Gross Domestic Product (GDP), MSMEs accounted for about 33% and 31% of India's GVA and GDP, respectively, in the year 2019-20. Unlike large enterprises that are concentrated in the metros, MSMEs are spread across smaller and larger rural as well as urban centres of India. They are also the biggest source of employment, especially in rural India, and contribute to the rural development and industrialisation. MSMEs also act as a great social bridge as smaller enterprises are owned by socially backward classes and women than are larger enterprises. For these reasons and more, the India government has always promoted the growth and development of MSMEs through policy initiatives, technology up gradation, and via other means. Consequently, MSMEs have also grown in multi-folds in the past decades in terms of the number of enterprises in operation and the collective revenue of the sector. Several challenges affect the growth of MSMEs, however. One of these is the limited academic studies into the financial performance of MSMEs, probably due to the unavailability of adequate data. The present research attempts to fill this gap by conducting a financial performance evaluation of 51 sample MSMEs based in the district of Nanded, Maharashtra. The research utilizes Data Envelopment Analysis (DEA) to compare the financial performance of sample MSMEs selectively using the suitable variables identified by Arasu et al. (2021). Findings suggest sharp differences in the financial performance of sample units. Inefficient units are suggested to improve their return on asset, return on capital employed, and net profit margin.
Some Aspects of Financial Management Affecting Cost of Operations of Microfin...iosrjce
MFIs play a fundamental role in the Kenyan economy in that they enhance financial deepening by
enabling millions of Kenyans to access financial services particularly credit. MFIs in Kenya have been facing
many challenges. Despite many successful MFIs containing credit risks within desired levels, they still face
greater challenges in the increased volatility of their portfolio. This study sought to analyze the financial factors
affecting the operations of MFIs in Nakuru town, Kenya. The target population constituted 127 MFIs’
employees. A sample of 57 respondents was drawn from the target population using stratified random sampling
method. A self-administered structured questionnaire was used to collect primary data from the sampled
respondents. Both reliability and content validity of the instrument were tested. The collected data were
analyzed with the aid of the Statistical Package for Social Sciences program. Data analyses were both
descriptive and inferential. The findings of the study were presented in tables that captured both descriptive and
inferential statistical results. Access to credit facilities and financial management skills were found to affect
operations of MFIs positively. On the other hand, it was revealed that both cost of operations and credit risk
negatively affect the MFIs’ operations. The study recommends that MFIs should encourage more savings from
their customers in order to minimize reliance on credit facilities from other financial institutions and should
also employ measures of minimizing the costs of operations. Moreover, MFIs are advised to employ measures of
minimizing the costs of operations, in addition to holding training workshops for their staff in order to equip
them with requisite skills in financial management. Lastly, they should enhance the profiling of all their
customers before advancing any credit facility to them
An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Ba...Dr. Amarjeet Singh
Profitability being one of the cardinal principles of bank lending acts as a game changer for the survival and success of private sector banks in India. In order to stay profitable, banks have to capitalise on every penny advanced to yield the expected returns. However, considering the constraints laid down by the Reserve Bank of India, banks have to maintain a minimum capital adequacy ratio, as per the current BASEL III regulations active in India. With the mergers of public sector banks, the challenge has got just tougher for the private sector banks in India. Expansion and Diversification are the key strategies adopted by the key players from the private banking sector, however, with the minimum capital adequacy ratio observed by them, it is necessary to understand its actual impact on the bank’s profitability. This research paper aims to throw light upon the linkage that capital adequacy has with the bank’s profitability. It attempts to establish a relation between the Capital Adequacy Ratio with the Net profits of the bank. For the purpose of this study, data from the past 5 years of the leading private sector banks has been collected, namely, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, AXIS Bank and YES Bank. The collected data has been analysed using Pearson’s Correlation to establish a relation between the CAR Ratio & the bank’s profitability. Hypothesis testing has been further done to study the quantum of proportionate change in the profitability with a change in the CAR Ratio for private sector banks using applicable research tools. The said research tools are applied to achieve the desired results while maintaining the required quantum of accuracy. It also aims to understand the proportionate impact of changes in CAR to the bank’s profitability, which can act as a suggested measure for banks to develop a reliable framework for efficient capital management and increase overall efficiency. The results derived from the data collected and analyzed aim to provide scope for further study on the subject matter.
Determinants of Savings Among Members of Cooperative Societies in Anambra Sta...ijtsrd
This study examines the determinants of savings among members of cooperative societies in Anambra state. Specifically, it provides empirical evidence on the socio-economic characteristics of members of the co-operatives and ascertains which of the socio-economic characteristics significantly determine savings mobilization among members of the cooperative groups. It also ascertained the range of savings of the members of the cooperative groups and identified the cooperative members' reasons for saving. Data for the study were obtained from 100 cooperative members with the aid of well structured questionnaires through a simple random sampling technique. Data were analyzed using descriptive statistics and multiple regression analysis. Results obtained showed that on the average the members saved N12, 241.57 every month. The average monthly savings is encouraging considering the fact that their monthly income is low. The major reasons for saving as indicated by the respondents include Security, Statutory as Cooperative Member, Investment and to obtain Loans. This is obtained from their mean statistics of 4.00, 3.87, 3.53 and 3.00 respectively. The R2 value of 0.916 obtains indicates that about 91.6 of observed variation in savings by farmers could be attributed to the combined influence of the various independent variables included in the regression equation. The F-statistic with 95.342 was significant at 0.000 levels of significance. There is a significant variation in the range of savings of the members of the cooperative groups. Socio-economic characteristics of members significantly determine the savings of members of cooperative societies in the state. Based on the analysis and findings of this study, the researcher therefore recommends that To increase the farmers' savings potentials, saving should be made statutory as cooperative member. The members should also be encouraged to invest more no matter how small. It is good to save but members should have predefined reasons before saving to enable them make judicious use of whatever amount saved. There is the need to improve the livelihood strategies of the farmers to bridge the noticeable gap that exist in the farmers' savings range. Anigbogu, Theresa Ukamaka | , Chikodiri Scholastica | Okeke, Uju M "Determinants of Savings Among Members of Cooperative Societies in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-1 , December 2018, URL: http://www.ijtsrd.com/papers/ijtsrd19075.pdf Direct URL: http://www.ijtsrd.com/management/business-economics/19075/determinants-of-savings-among-members-of-cooperative-societies-in-anambra-state-nigeria/anigbogu-theresa-ukamaka
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
Financing the Bottom of the Pyramid By Saurabh Bhatsmeniwas
Financing the Bottom of the Pyramid By Saurabh Bhat
IIT Bombay
October 2017
Saurabh Bhat
Founder MD&CEO, Niwas Homefin Services, smeniwas.com
This is the presentation which was part of the Lecture delivered by Saurabh Bhat at Shailesh Mehta School Auditorium, IIT Bombay recently
The discussion and content focuses on the challenges and attraction of lending to the bottom of the pyramid segment . It also delves into the various constituent credit products targeted at the BOP segment and the viability of the same
smeniwas is a online platform targeting MSMEs and focuses on financial (fund raising incl debt and equity) and marketing advisory to small business, start up companies and entrepreneurs..
Financial Inclusion and Micro and Small Enterprises GrowthDr. Amarjeet Singh
The persons or firms linked with the either way of
financial transaction are known as participants of financial
inclusion financially included otherwise financially
excluded. The normal way of flow of money is routed
through banking system, post office, insurance and FBFC
channels. The MSE is financially included with operation of
saving account, current account or loan account with banks;
financial transaction with other government financial
agencies as well as some private sector NBFC. Recent
initiatives of Government of India and Indian Banking
system have accelerated the performance of financial
inclusion through various schemes such as MNREGS,
Jandhan, Atal Pension Yojna, MUDRA and so forth. The
MUDRA scheme, credit scheme for MSE, credit scheme for
KVIC & Coir firm, Kishan credit card, General Credit
Card are exclusive financial inclusion scheme for MSE
credit. Out of total size of MSEs, less than forty percent
units are getting benefits from schedule commercial banks;
as on 2017-18 only Rs. 1337 billion credit facilities given by
the lending institutions. The paper examines the current
status and potential prospect of financial inclusion at given
numbers of units and employment.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Factors influencing agricultural credit demand in northern ghanaHudu Zakaria
The greatest challenge to food security is low productivity emanating from slow growth in the agricultural sector and one of the reasons for this is little or no access to financial resources by producers. Credit is one of the empowerment tools that have the potential to boost the productivity, increase food security and change the life of farmers from a situation of abject poverty to a more dignified life in the long run. Using a household survey data from United State Agency for International Development's feed the future initiative; this study employed the logistic regression model to investigate the factors influencing households' demand for agricultural credit placing much emphasis on membership to organization. A total sample size of 2,330 farm households selected from Northern Ghana was used. The results of the logistic regression model revealed significant and positive variables such as age, education, group membership and source of credit. We therefore call on stakeholders to encourage formation of cooperative groups to enable farmers pull resources together or streamline loan application procedures, intensify education of farmers on loan procedures and promote flexibility in types of collateral demanded by financial institutions in order to enhance access.
Role of Bilateral Institutions in Capacity Building A Study of EU SRIP in Ana...YogeshIJTSRD
The study evaluated the role of bilateral institutions in capacity building with a focus on the European Union Support for Reforming Institutions Programme EU SRIP in Anambra State. The study examined relevance of EU SRIP goals, effect of EU SRIP on enhancement of civil servants competence in public finance management and challenges facing implementation of EU SRIP in Anambra State. Data were collected from 330 senior civil servants from two purposively selected ministries Ministries of Finance and Economic Planning and Budget. Mean, frequency counts and tables were used to present and describe collected data. Also hypotheses were tested through the application of t tests at the 0.05 level of significance. Findings revealed that the goals of EU SRIP were in line with critical capacity building needs of Anambra State public finance management that EU SRIP had positive effect on the fiscal management competence enhancement of civil servants. The study therefore, recommends among others a simplification of operational procedures of EU SRIP to make it easier for government official at state and local governments to key in. Grace C. Madubuike | Prof. M. C. Muo "Role of Bilateral Institutions in Capacity Building: A Study of EU-SRIP in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd44943.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/44943/role-of-bilateral-institutions-in-capacity-building-a-study-of-eusrip-in-anambra-state-nigeria/grace-c-madubuike
Changing Issues Related to Declining of Non-Performing Assets in Banksijtsrd
This paper explores an empirical approach to the analysis of Non Performance Assets NPAs of public, private, and foreign sector banks in India. the NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. This paper aims to find the fundamental factors which impact NPAs of banks. A model consisting oftivo types of factors, viz., macroeco nomie factors and bank specific parameters, is developed arid the behavior of NPAs of the three categories of banks is observed. The empirical analysis assesses how macroeconomic factors and bank specific parameters affect NPAs of a particular category of banks. The results show that movement in NPAs over the years can be explained well by the factors considered in the model for the public and private sector banks. The other important results derived from the analysis include the finding that banks exposure to priority sector lending educes NPAs. The Impact of competitive culture of public,, private, and foreign sector banks in India with in themselves helpes in declining of NPAs from banks. Dr. Mohan S. Rode "Changing Issues Related to Declining of Non-Performing Assets in Banks" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29684.pdf Paper URL: https://www.ijtsrd.com/management/other/29684/changing-issues-related-to-declining-of-non-performing-assets-in-banks/dr-mohan-s-rode
Firm level determinants to small and medium sized enterprises’ access to fina...rrpidani
Firm Level Determinants to Small and Medium-Sized Enterprises’ Access to Financing in Indonesia by Rita Pidani and Ishak Balaka. Academy of Taiwan Business Management Review, April 2013, Volume 9, Number 1, pp. 117-126.
An Investigation into the Financial Performance of Micro, Small and Medium En...Dr. Amarjeet Singh
Micro, small and medium enterprises (MSMEs) are an indispensable part of the Indian economy. In terms of Gross Value Added (GVA) and Gross Domestic Product (GDP), MSMEs accounted for about 33% and 31% of India's GVA and GDP, respectively, in the year 2019-20. Unlike large enterprises that are concentrated in the metros, MSMEs are spread across smaller and larger rural as well as urban centres of India. They are also the biggest source of employment, especially in rural India, and contribute to the rural development and industrialisation. MSMEs also act as a great social bridge as smaller enterprises are owned by socially backward classes and women than are larger enterprises. For these reasons and more, the India government has always promoted the growth and development of MSMEs through policy initiatives, technology up gradation, and via other means. Consequently, MSMEs have also grown in multi-folds in the past decades in terms of the number of enterprises in operation and the collective revenue of the sector. Several challenges affect the growth of MSMEs, however. One of these is the limited academic studies into the financial performance of MSMEs, probably due to the unavailability of adequate data. The present research attempts to fill this gap by conducting a financial performance evaluation of 51 sample MSMEs based in the district of Nanded, Maharashtra. The research utilizes Data Envelopment Analysis (DEA) to compare the financial performance of sample MSMEs selectively using the suitable variables identified by Arasu et al. (2021). Findings suggest sharp differences in the financial performance of sample units. Inefficient units are suggested to improve their return on asset, return on capital employed, and net profit margin.
Some Aspects of Financial Management Affecting Cost of Operations of Microfin...iosrjce
MFIs play a fundamental role in the Kenyan economy in that they enhance financial deepening by
enabling millions of Kenyans to access financial services particularly credit. MFIs in Kenya have been facing
many challenges. Despite many successful MFIs containing credit risks within desired levels, they still face
greater challenges in the increased volatility of their portfolio. This study sought to analyze the financial factors
affecting the operations of MFIs in Nakuru town, Kenya. The target population constituted 127 MFIs’
employees. A sample of 57 respondents was drawn from the target population using stratified random sampling
method. A self-administered structured questionnaire was used to collect primary data from the sampled
respondents. Both reliability and content validity of the instrument were tested. The collected data were
analyzed with the aid of the Statistical Package for Social Sciences program. Data analyses were both
descriptive and inferential. The findings of the study were presented in tables that captured both descriptive and
inferential statistical results. Access to credit facilities and financial management skills were found to affect
operations of MFIs positively. On the other hand, it was revealed that both cost of operations and credit risk
negatively affect the MFIs’ operations. The study recommends that MFIs should encourage more savings from
their customers in order to minimize reliance on credit facilities from other financial institutions and should
also employ measures of minimizing the costs of operations. Moreover, MFIs are advised to employ measures of
minimizing the costs of operations, in addition to holding training workshops for their staff in order to equip
them with requisite skills in financial management. Lastly, they should enhance the profiling of all their
customers before advancing any credit facility to them
An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Ba...Dr. Amarjeet Singh
Profitability being one of the cardinal principles of bank lending acts as a game changer for the survival and success of private sector banks in India. In order to stay profitable, banks have to capitalise on every penny advanced to yield the expected returns. However, considering the constraints laid down by the Reserve Bank of India, banks have to maintain a minimum capital adequacy ratio, as per the current BASEL III regulations active in India. With the mergers of public sector banks, the challenge has got just tougher for the private sector banks in India. Expansion and Diversification are the key strategies adopted by the key players from the private banking sector, however, with the minimum capital adequacy ratio observed by them, it is necessary to understand its actual impact on the bank’s profitability. This research paper aims to throw light upon the linkage that capital adequacy has with the bank’s profitability. It attempts to establish a relation between the Capital Adequacy Ratio with the Net profits of the bank. For the purpose of this study, data from the past 5 years of the leading private sector banks has been collected, namely, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, AXIS Bank and YES Bank. The collected data has been analysed using Pearson’s Correlation to establish a relation between the CAR Ratio & the bank’s profitability. Hypothesis testing has been further done to study the quantum of proportionate change in the profitability with a change in the CAR Ratio for private sector banks using applicable research tools. The said research tools are applied to achieve the desired results while maintaining the required quantum of accuracy. It also aims to understand the proportionate impact of changes in CAR to the bank’s profitability, which can act as a suggested measure for banks to develop a reliable framework for efficient capital management and increase overall efficiency. The results derived from the data collected and analyzed aim to provide scope for further study on the subject matter.
Determinants of Savings Among Members of Cooperative Societies in Anambra Sta...ijtsrd
This study examines the determinants of savings among members of cooperative societies in Anambra state. Specifically, it provides empirical evidence on the socio-economic characteristics of members of the co-operatives and ascertains which of the socio-economic characteristics significantly determine savings mobilization among members of the cooperative groups. It also ascertained the range of savings of the members of the cooperative groups and identified the cooperative members' reasons for saving. Data for the study were obtained from 100 cooperative members with the aid of well structured questionnaires through a simple random sampling technique. Data were analyzed using descriptive statistics and multiple regression analysis. Results obtained showed that on the average the members saved N12, 241.57 every month. The average monthly savings is encouraging considering the fact that their monthly income is low. The major reasons for saving as indicated by the respondents include Security, Statutory as Cooperative Member, Investment and to obtain Loans. This is obtained from their mean statistics of 4.00, 3.87, 3.53 and 3.00 respectively. The R2 value of 0.916 obtains indicates that about 91.6 of observed variation in savings by farmers could be attributed to the combined influence of the various independent variables included in the regression equation. The F-statistic with 95.342 was significant at 0.000 levels of significance. There is a significant variation in the range of savings of the members of the cooperative groups. Socio-economic characteristics of members significantly determine the savings of members of cooperative societies in the state. Based on the analysis and findings of this study, the researcher therefore recommends that To increase the farmers' savings potentials, saving should be made statutory as cooperative member. The members should also be encouraged to invest more no matter how small. It is good to save but members should have predefined reasons before saving to enable them make judicious use of whatever amount saved. There is the need to improve the livelihood strategies of the farmers to bridge the noticeable gap that exist in the farmers' savings range. Anigbogu, Theresa Ukamaka | , Chikodiri Scholastica | Okeke, Uju M "Determinants of Savings Among Members of Cooperative Societies in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-1 , December 2018, URL: http://www.ijtsrd.com/papers/ijtsrd19075.pdf Direct URL: http://www.ijtsrd.com/management/business-economics/19075/determinants-of-savings-among-members-of-cooperative-societies-in-anambra-state-nigeria/anigbogu-theresa-ukamaka
mpact of Foreign Shares to Profitability in Turkish Participation Banksinventionjournals
Covering the period 2006 to 2015, this paper aims at empirically studying the impact of foreign shares on the profitability of participation banks. Several econometrical models have been implemented to reveal this relation among variables. There is no co-integration result between profitability on the one hand, and foreign shares, deposits, loans and equity on the other hand. According to the Granger causality test lag 1, a bidirectional relationship exists between deposits and loans. Meanwhile, a unidirectional relationship exists between profitability and foreign shares.
Financing the Bottom of the Pyramid By Saurabh Bhatsmeniwas
Financing the Bottom of the Pyramid By Saurabh Bhat
IIT Bombay
October 2017
Saurabh Bhat
Founder MD&CEO, Niwas Homefin Services, smeniwas.com
This is the presentation which was part of the Lecture delivered by Saurabh Bhat at Shailesh Mehta School Auditorium, IIT Bombay recently
The discussion and content focuses on the challenges and attraction of lending to the bottom of the pyramid segment . It also delves into the various constituent credit products targeted at the BOP segment and the viability of the same
smeniwas is a online platform targeting MSMEs and focuses on financial (fund raising incl debt and equity) and marketing advisory to small business, start up companies and entrepreneurs..
Financial Inclusion and Micro and Small Enterprises GrowthDr. Amarjeet Singh
The persons or firms linked with the either way of
financial transaction are known as participants of financial
inclusion financially included otherwise financially
excluded. The normal way of flow of money is routed
through banking system, post office, insurance and FBFC
channels. The MSE is financially included with operation of
saving account, current account or loan account with banks;
financial transaction with other government financial
agencies as well as some private sector NBFC. Recent
initiatives of Government of India and Indian Banking
system have accelerated the performance of financial
inclusion through various schemes such as MNREGS,
Jandhan, Atal Pension Yojna, MUDRA and so forth. The
MUDRA scheme, credit scheme for MSE, credit scheme for
KVIC & Coir firm, Kishan credit card, General Credit
Card are exclusive financial inclusion scheme for MSE
credit. Out of total size of MSEs, less than forty percent
units are getting benefits from schedule commercial banks;
as on 2017-18 only Rs. 1337 billion credit facilities given by
the lending institutions. The paper examines the current
status and potential prospect of financial inclusion at given
numbers of units and employment.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Factors influencing agricultural credit demand in northern ghanaHudu Zakaria
The greatest challenge to food security is low productivity emanating from slow growth in the agricultural sector and one of the reasons for this is little or no access to financial resources by producers. Credit is one of the empowerment tools that have the potential to boost the productivity, increase food security and change the life of farmers from a situation of abject poverty to a more dignified life in the long run. Using a household survey data from United State Agency for International Development's feed the future initiative; this study employed the logistic regression model to investigate the factors influencing households' demand for agricultural credit placing much emphasis on membership to organization. A total sample size of 2,330 farm households selected from Northern Ghana was used. The results of the logistic regression model revealed significant and positive variables such as age, education, group membership and source of credit. We therefore call on stakeholders to encourage formation of cooperative groups to enable farmers pull resources together or streamline loan application procedures, intensify education of farmers on loan procedures and promote flexibility in types of collateral demanded by financial institutions in order to enhance access.
Role of Bilateral Institutions in Capacity Building A Study of EU SRIP in Ana...YogeshIJTSRD
The study evaluated the role of bilateral institutions in capacity building with a focus on the European Union Support for Reforming Institutions Programme EU SRIP in Anambra State. The study examined relevance of EU SRIP goals, effect of EU SRIP on enhancement of civil servants competence in public finance management and challenges facing implementation of EU SRIP in Anambra State. Data were collected from 330 senior civil servants from two purposively selected ministries Ministries of Finance and Economic Planning and Budget. Mean, frequency counts and tables were used to present and describe collected data. Also hypotheses were tested through the application of t tests at the 0.05 level of significance. Findings revealed that the goals of EU SRIP were in line with critical capacity building needs of Anambra State public finance management that EU SRIP had positive effect on the fiscal management competence enhancement of civil servants. The study therefore, recommends among others a simplification of operational procedures of EU SRIP to make it easier for government official at state and local governments to key in. Grace C. Madubuike | Prof. M. C. Muo "Role of Bilateral Institutions in Capacity Building: A Study of EU-SRIP in Anambra State, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd44943.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/44943/role-of-bilateral-institutions-in-capacity-building-a-study-of-eusrip-in-anambra-state-nigeria/grace-c-madubuike
Indian Growth under Rising Risks Show Financial Stability Report June 2016atul baride
RBI Detail Financial Stability Report shows that, Growth is Stagnant and Corporate Indebtedness ability to service Banking Debt weakening daily. The Indian Public sector Banks Return on Assets has fallen to mere 0.4 , ROE 4.8 , and Net Interest Income to 8.3 from 15.8 in 2012. The Iron and Steel , Telecom, Construction, Electricity, Transport are enlarging systemic risks. While Macro Economic and Institutional Risk have risen. The Housing Price and Price Indices showing Significant divergence.
My Comments : Britain exit from Euro is not accounted. And, Slow down in IT is not considered. Also, Slowing Global Growth particularly China and now EU is not considered. The Rise 45 % Investors from Small Town indicates Equity Markets is taken as Positive Dispersion, While it shows that Indian Equity market is increasingly in ' Weaker Hands ' .
The Big Money should surely ' Press Pause Button ' and Cash is going to be King
These are the slides for SHCR II Module 3: Rolling with Resistance.
This module looks at the issue of 'resistance to change’: rather than seeing resistance as a negative thing, we shift our perspective so that we see dissent, diversity and disruption as essential components of effective change.
Agenda:
What do we mean by resistance to change?
What are some of the ways to look at resistance to change?
Importance of diversity in leading change and its implications in terms of resistance
Diversity is critical to innovation and change
Being a champion for diversity
Impact and intent
The effectiveness of a change agent is not a matter of intention; it’s a matter of impact
How to stop talking at someone and start talking to them
What you can do to build impact and intent
Using the Stages of Change model to help people through change
Why do people resist change?
What is the transtheoretical model of behaviour change?
An example of the model in practice
What we tend to do when dealing with resistance and what we should do
Questions and call to action
Questions for reflection:
What does resistance mean to you?
Think about the things you resist as well as your responses to others’ resistance
How do you work with resistance as a change leader?
How can you make sure that the changes you make achieve the impact you desire and are sustainable?
….. do not create dependency?
….. generate self-efficacy in others?
Who are you interacting with and where they are on the Stages of Change model?
Call to action:
Reflect deeply on how you operate as an agent for change.
Consider the impact of your communication and behaviour beyond your intent.
Listen to others’ views, engage others in change and help others through the stages of change.
" Stability testing is an essential part of the process of ensuring that the patient receives a product that meets established standards of safety, efficacy and quality."
Content :
* USP Definition of Stability.
* The Five Types of Stability.
* Factors affecting stability.
* Stability studies in manufacturing.
* Observing products for evidence of instability.
* Responsibility of the pharmacist.
Reference : USP – United States Pharmacopeia, 2008.
{1191} Stability consideration in dispensing practice/ General information, page 2414.
Safeguard your lending program by learning about the 8 steps of credit risk management. Learn about nonfinancial risks, structuring the loan, and more.
Optimise-GB presents the stages of change management and how you can use programme and project tools to ensure delivery. This presentation also takes you through the elements of change resistance and what can be done about it. Thank you Simon Misiewicz
The main objective of microfinance is that the poor have access to financial services at a very low cost without any collateral, and have design its microfinance products by focusing on the demands and needs of the customers to enable the microfinance institution to increase its reach among the poor, focusing on the quality of their services along with their products for the appropriate service Customers try to avail its services. In today's era of advertisement, there no organization able to generate demands to avail its services to its customers without publicity, so in order to improve its services, MFI has to take attention to publicity. This research paper is divided into five sections, the first introduction in which you introduce microfinance and service quality in India, customer's debt repayment intention with credit objective attainment. The second section review of the literature, in which includes some research by the researcher in the field of microfinance service quality from around the world, because there is very little work has been done in India so far.
The third section is the research Methodology section, where the researcher described to analyze, for data collection distributing a six-point Likert scale questionnaire distributed among a joint liability group run by SC / ST women in a small town named Rajepur under Unnao district in the Uttar Pradesh. The fourth section is analysis and description, in order to check the quality of services, three elements of the SERVQUAL model have been used, using a simple language for description, the quantitative analysis has been done.
the fourth section of the research paper is conclusion and recommendation, this paper concluded that due to customer's loan repayments intention with credit reliability, is willing to take advantages of MFI's services by taking care of quality services, the researcher recommended is that MFI has to focus on marketing strategy among customers along with increasing research activities with collaboration of educational institutions and research scholars. Because any academic research plays a crucial role in developing society.
A Study on Factors Influencing the Financial Performance Analysis Selected Pr...Dr. Amarjeet Singh
The growth of a country's banking sector has a significant impact on its economic development. The banking sector plays a critical role in determining a country's economic future. A well-planned, structured, efficient, and viable banking system is an essential component of an economy's economic and social infrastructure. In modern society, a strong banking system is required because it meets the financial needs of the modern society. In a country's economy, the banking system plays a crucial role. Because it connects surplus and deficit economic agents, the bank is the most important financial intermediary in the economy. The banking system is regarded as the economy's lifeline. It meets the financial needs of commerce, industry, and agriculture. As a result, the country's development and the banking system are intertwined. They are critical in the mobilisation of savings and the distribution of credit to various sectors of the economy. India's private sector banks play a critical role in the country's economic development. So The financial performance of private sector banks must be evaluated carefully.
Financial Risk and Financial Performance A Critical Analysis of Commercial Ba...ijtsrd
Regardless developed or developing, banking sector serves as the spine of the economy of a country. Financial risks played a major role in the global banking crisis which occurred in the past decades. After which financial risks remained a major topic of interest globally. This in turn threatens their financial viability. The country’s banking sector is vulnerable to risks whether it is financial or non financial. This made it essential to include operational risk as area of study along with other financial risks as the risk cannot be ignored. This study therefore, investigated the effect of financial risk on financial performance of commercial banks listed in Rwanda Stock Exchange. The study used financial distress theory, interest rate parity theory, shift ability theory and stewardship theory Descriptive research design is used in the study. Target population of the study constituted all the banks listed in Rwanda Stock Exchange. The study used random panel technique for panelling data for the period of 2008 to 2019. Data was analysed through the use of descriptive statistics and multiple linear regression analysis. From table 4.12 of coefficients, solvency risk amongst the sub variables was highly influenced by financial performance which reported a t value of 3.188 hence the most significant. Dr. Umamaheswari K | Dr. Vidhya K | Dr. Neelam Maurya "Financial Risk & Financial Performance: A Critical Analysis of Commercial Banks Listed in Rwanda Stock Exchange" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-4 , June 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50288.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50288/financial-risk-and-financial-performance-a-critical-analysis-of-commercial-banks-listed-in-rwanda-stock-exchange/dr-umamaheswari-k
Financial intermediation is a crucial function of Banks, Non-Banking financial companies (NBFCs) and Development Financial Institutions (DFIs) the post reform period in India is characterized by phenomenal growth of NBFCs complementing the role of banks in mobilizing funds and making it available for investment purposes. During the last decade NBFCs have undergone wide volatility and change as an industry and have been witnessing considerable business upheaval over the last decade because of market dynamics, public sentiments and regulatory environment. To evaluate the soundness of NBFCs in Tamil Nadu over a decade, the authors made an attempt of CAMEL criteria for analysis of selected Companies. For this purpose, out of 36 NBFCs in Tamil Nadu 4 Government Companies, 13 Small Companies and 13 Small Companies and another 13 Top Companies were selected as sample respondents on the basis of multi-stage random sampling, to evaluate soundness of each NBFCs through Capital Adequacy, Asset Quality, Management quality, Earnings and Liquidity, Based on findings the suggestions were offered to overcome the difficulties face by selected NBFCs in their development.
Financial Performance Analysis of Selected Private Sector Banks in IndiaDr. Amarjeet Singh
The performance of the banking system has been
widely recognized as an important element for economic
growth and for enhancing the economic and financial system
buoyancy in facing financial crisis. In fact, such a vital role in
the economy has made banks to be considered as one of the
most strained kinds of businesses in the globe as they are
subject to close scrutiny since banks will otherwise be
counterproductive and severely damage the economy of a
country. Efficient and profitable banks maximize
shareholders’ value and encourage the shareholders to make
additional investments. As a result of which, more
employment opportunities will be created and more goods
and service will be produced and ultimately bring about
economic growth in which private and public sector banking
institutions play equal role. The present study analyses the
financial performance of selected private banks in India with
the help of correlation analysis by considering return on total
assets as the independent variable.
The Performance of Financial Institutions and Internal Control System A Case ...ijtsrd
The study was all about internal control systems and the performance of financial institutions of GT Bank, Kigali, Rwanda 2016 2020 .Methodology of the study based on explanatory research design the population of this study was 105 of employees of GT Bank Rwanda, which was used as sample size using universal sampling method to gather information from respondents. The study used descriptive and inferential statistics. Findings on the effect of control activities on financial performance of GT Bank Rwanda were presented on Table 4.9 indicates the value of R square in this study is 87.3 means that the proportion of financial performance as dependent variable is explained by the independent variables control activities at 87.3 . This indicates that the model is very strong, as the independent variable very highly explain the dependent variable. The adjusted R square is used to compensate for additional variable in the model. In this case, the adjusted R square is 87.2 . Findings on the effect of risk assessment on financial performance of GTBank Rwanda were presented on Table 4.12 show the value of R square in this study is 61.1 means that the proportion of financial performance dependent variable is explained by the independent variables Risk assessment at 61.1 . This indicated that the model was strong, as the independent variable highly explain the dependent variable. The adjusted R square was used to compensate for additional variable in the model. In this case, the adjusted R square is 60.8 . Findings on the effect of control environment on financial performance of banking institutions in Rwanda confirmed on table 4.15 present the value of R square in this study was 51.1 means that the proportion of financial performance dependent variable is explained by the independent variables Control environment at 51.1 . Dr. Vidhya K | Dr. Neelam Maurya | Dr. Umamaheswari K "The Performance of Financial Institutions & Internal Control System - A Case Study of Guaranty Trust Bank, Kigali Rwanda" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-4 , June 2022, URL: https://www.ijtsrd.com/papers/ijtsrd50323.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/50323/the-performance-of-financial-institutions-and-internal-control-system--a-case-study-of-guaranty-trust-bank-kigali-rwanda/dr-vidhya-k
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Factors affecting financial sustainability of microfinance institutions
1. Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.3, No.6, 2012
Factors Affecting Financial Sustainability of Microfinance
Institutions
Anand K. Rai (Corresponding author)
Army Institute of Management and Technology,
Plot M-1, Pocket P-5, Greater Noida (U.P.), India.
Tele: 91-9811743141 E-mail: anandleo19@hotmail.com
Sandhya Rai
Institute of Management Studies, C 238,Bulandshar Road
Lal Quan Ghaziabad (U.P.) India.
Tele: 91-9278221238 E-mail: raisandhya@gmail.com
Abstract
Millions of people in developing countries have been given access to formal financial services through
microfinance programs. Nevertheless, millions of potential clients still remain un-served and the demand for
financial services far exceeds the currently available supply. Given significant capital constraints, expansion of
microfinance programs remains a formidable challenge facing the microfinance industry. Moreover, it is
observed that microfinance organizations have had various degrees of sustainability. One such sustainability is
the financial sustainability. Financial sustainability has been defined by various researchers differently. As such
there is no clear cut definition of the word financial sustainability. The MIX Market and various other agencies
like ACCION, Women’s World Banking etc. have attempted to define the term financial sustainability in their
own limited way. Therefore this paper attempts to find out the factors which affect the financial sustainability
and thereafter propose a more comprehensive and representative model for financial sustainability and create an
index to observe the financial performance of microfinance sector. The financial data of microfinance institutions
from India and Bangladesh suggests that the capital/ asset ratio, operating expenses/loan portfolio and portfolio
at risk> 30 days are the main factors which affect the sustainability of microfinance institutions.
Keywords: Microfinance, Financial Sustainability, Portfolio at Risk>30 days, Capital to Asset ratio, Operating
expenses to Loan portfolio
1. Introduction:
Millions of people in developing countries have been given access to formal financial services through
microfinance programs. Nevertheless, millions of potential clients still remain un-served and the demand for
financial services far exceeds the currently available supply. Given significant capital constraints, expansion of
microfinance programs remains a formidable challenge facing the microfinance industry. Moreover, it is
observed that microfinance organizations have had various degrees of sustainability. One such sustainability is
the financial sustainability. Financial sustainability has been defined by various researchers differently. As such
there is no clear cut definition of the word financial sustainability. The MIX Market and various other agencies
like ACCION, Women’s World Banking etc. have attempted to define the term financial sustainability in their
own limited way.
The Financial Self Sufficiency is an approximate indicator of the impact of subsidies on an organization’s
sustainability. In an environment where grants represent less than 1% of the sources of funds of MFIs
(Microfinance Institutions) the FSS calculation is no longer relevant. Since profit rates are also running at quite
high levels and very few MFIs are now making losses, the Operational Self Sufficiency too is not a very
interesting indicator. Therefore this paper attempts to propose a more comprehensive and representative model
for financial sustainability and create an index to observe the financial performance of microfinance sector.
2. Research Objectives: The study is focused on achievement of following two objectives:
1. To study the factors affecting financial sustainability of microfinance institutions.
2. To create a financial sustainability index for the microfinance sector.
3.Literature Review: Different literatures noted that financial sustainability is one of the areas that we need to
look at to assess the performance of micro finance institutions.
The MIX Market defines the term financial sustainability as having an operational sustainability level of 110%
or more, while operational sustainability is defined as having an operational self-sufficiency level of 100% or
1
2. Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.3, No.6, 2012
more. The operational self-sufficiency measure is defined as: total financial revenue /financial expense +
operating expense.
Yeron in 1992 discussed that the two most important objectives for a rural financial institutions to be successful
are financial self-sustainability and more outreach to the target rural population. Financial self-sustainability is
said to be achieved when the return on equity, net of any subsidy received, equals or exceeds the opportunity cost
of funds.
According to Khandker et al. (1995), the concept of sustainability of microfinance can be divided into four
interrelated ideas; namely, financial viability, economic viability, institutional viability and borrower viability.
Financial viability relates to the fact that a lending institution should at least equate the cost per each unit of
currency lent to the price it charges its borrowers (i.e. the interest rate). Economic viability relates to meeting the
economic cost of funds (opportunity cost) used for credit and other operations with the income it generates from
its lending activities.
Regarding indicator of financial sustainability, Khandker et, al. (1995) pointed out that loan repayment
(measured by default rate) could be another indicator for financial sustainability of MFIs; because, low default
rate would help to realize future lending.
Meyer (2002) noted that the poor needed to have access to financial service on long-term basis rather than just a
onetime financial support. Short-term loan would worsen the welfare of the poor (Navajas et al., 2000).
Meyer (2002) also stated that the financial un-sustainability in the MFI arises due to low repayment rate or
un-materialization of funds promised by donors or governments.
Meyer (2002) indicated, "Measuring financial sustainability requires that MFIs maintain good financial accounts
and follow recognized accounting practices that provide full transparency for income, expenses, loan recovery,
and potential losses."
ACCION and Women’s World Banking have also given some popular tools for the performance indicators and
standards for MFIs. Similarly Women’s World Banking categorized performance indicators into qualitative and
quantitative parameters. The emphasis is on MFIs achieving minimum agreed performance standards and taking
significant incremental steps to improve performance.
4. Research Methodology: In this section a brief overview of various dimensions of the research, tools and
techniques and methods used to achieve two research objectives has been discussed.
4.1 The Data:
The research is analytical and empirical in nature and makes use of secondary data. The population for the study
is all MFIs of India and Bangladesh. The data has been sourced from Microfinance Information Exchange, USA
(www.mixmarket.org). The sample period undertaken for the first objective is from the year 2005-06 to
2009-10. For the second objective, the data is taken for the year 2009-10.
4.2 The Sample:
4.2.1 Sample Frame:
The sample frame is the list of target population. The sample frame in this study is all those MFIs of India and
Bangladesh which are reporting their performance data to Microfinance Information Exchange (MIX) USA.
4.2.2 Sample Size:
Further to do a regression analysis, the data on 26 microfinance institutions (MFIs) of India and 26
microfinance institutions of Bangladesh are collected from the Microfinance Information Exchange (or the
MIX), a not-for-profit private organization that aims to promote information exchange in the microfinance
industry. The database contains observation per institution from the Year 2005-06 to the Year 2009-10 for both
the countries.
4.2.3 Sampling Technique and Procedure:
The institutions selected, are based in large part on the quality and extent of their data. The quality of the MFIs
have been seen and judged on the basis of their legal form, their age and the frequencies with which theses MFIs
are reporting data to MIX. Some of the MFIs belong to NBFC category while others belong to NGO category.
Similarly, MFIs can also be categorized as Young, Mature and Old.
Simple random sampling is chosen for analyzing the performance of MFIs of India and Bangladesh. In order to
choose 26 MFIs from India and 26 MFIs from Bangladesh, all MFIs reported their data from 2005-06 to 2009-10
to MIX were listed down. In case of India, 70 such MFIs were found while in case of Bangladesh, 26 MFIs
reported their data for the said period. Each of these 70 Indian MFIs were then given a unique number. Twenty
six MFIs were then chosen by simple random sampling method. Same procedure is adopted for the selection of
sample for MFIs of Bangladesh.
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4.3 Models and Techniques:
4.3.1 Multiple Linear Regression Analysis:
To Find out the factors affecting Financial sustainability a Multiple Linear Regression analysis is carried out in
respect of Indian MFIs and Bangladesh MFIs for data of 5 years i.e. from 2005-06 to 2009-10.
A multiple regression equation can be expressed as:
Y = αi + β1 X1it + β2 X2it + β3 X3it + β4 X4it + β5 X5it + β6 X6it + β7 X7it +β8X8it +εi --------------- (1)
Where:
Y= dependent variable {(Operational Self Sufficiency (OSS) in percentage for firm ‘i’ during time period‘t’)}
αi = Constant
β1= Regression coefficient of Capital/Assets ratio
X1it = Independent variable Capital/Assets ratio for firm ‘i’ during time period‘t’
β2 = Regression coefficient of Number of active borrowers
X2it = Independent variable Number of active borrowers for firm ‘i’ during time period‘t’
β3 = Regression coefficient of Yield
X3it = Independent variable Yield firm ‘i’ during time period‘t’
β4 = Regression coefficient of Operating expense/loan portfolio
X4it = Independent variable Operating expense/loan portfolio for firm ‘i’ during time period‘t’
β5 = Regression coefficient of Portfolio at risk> 30 days
X5it = Independent variable Portfolio at risk> 30 days for firm ‘i’ during time period‘t’
β6 = Regression coefficient of Women borrowers
X6it = Independent variable Women borrowers for firm ‘i’ during time period‘t’
β7 = Regression coefficient of Debt Equity ratio
X7it = Independent variable Debt Equity ratio for firm ‘i’ during time period‘t’
β8 = Regression coefficient of Inception
X8it = Independent variable Inception for firm ‘i’ during time period’t’
εi = Error term
In order to develop the financial sustainability index model, the outcome of multiple linear regression is used
along with scaling and weighted average.
5. Findings and Results:
5.1 Financial Factors Affecting Sustainability of Indian MFIs:
The value of adjusted R square explains that 50.2 percent of the variation in dependent variable i.e. Operational
Self Sufficiency (proxy for sustainability) is due to variations in independent variables taken together namely
Number of Active Borrowers, Percent of Women Borrowers, Age of MFIs, Debt/Equity ratio, Capital/Assets
ratio, PAR>30 days, Borrower per Staff Member, ROE and Yield (Table-5.1). This leaves 49.8 percent
unexplained. The value of R square is significant, indicated by p value (0.000) of F statistics as given in ANOVA
Table-5.2. This informs that the independent variables, taken together as a set, are significantly related to
dependent variable. The multiple correlation is therefore highly significant.
Table-5.3 shows that the values of p are 0.008, 0.000, 0.000 and 0.000 for the indicators: Number of Active
Borrowers, Capital/Assets ratio, Yield and Operating Expense/Loan Portfolio respectively. These values are less
than the level of significance (0.05). Therefore, the null hypotheses are rejected and, it can be concluded that
these indicators influence the dependent variable OSS. Other independent variables are not significant thereby
not making a significant contribution to the prediction.
5.2 Financial Factors Affecting Sustainability of the MFIs of Bangladesh:
The value of adjusted R square explains that 54 percent of the variation in dependent variable i.e. Operational
Self Sufficiency (proxy for sustainability) is due to variations in independent variables taken together namely
Number of Active Borrowers, Percent of Women Borrowers, Age of MFIs, Debt/Equity ratio, Capital/Assets
ratio, PAR>30 days, Borrowers per Staff Member, and Yield (Table-5.4). This leaves 46 percent unexplained.
Value of R square is significant, as indicated by p value (0.000) of F statistics shown in ANOVA Table-5.5.
This informs that the independent variables, taken together as a set, are significantly related to dependent
variable. The multiple correlation is therefore highly significant.
Table 5.6 shows that the values of p are 0.004, 0.017, and 0.000 for the indicators PAR>30 days, Operating
Expense/Loan Portfolio, and Capital/Assets ratio respectively. These values are less than the level of significance
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(0.05). Therefore, the null hypotheses are rejected and it can be concluded that these indicators influence the
dependent variable OSS.
Now, it can be observed that the factors common to both these countries that affect the financial sustainability
are Capital/ asset ratio and Operating expenses/Loan Portfolio. Therefore these indictors have been included
along with Operational Self Sufficiency to create Sustainability index. Many researchers like Khandelkar, Yeron
etc. have suggested to include repayment rate for the checking the sustainability of MFIs. Therefore Portfolio at
Risk is taken as proxy for repayment rate and included in creation of sustainability index.
5.3 Methodology to Develop the Financial Sustainability Index: In order to develop a model for financial
sustainability index, following steps are involved.
Step-1: The model for financial sustainability will be developed by using four financial indicators. These are
Indicator-1 Portfolio at risk>30 days Past Due
Formula: Unpaid principal balance of past due loans (with overdue > 30 days) / Total Gross outstanding portfolio
Standard: PAR > 30 days at less than 10%
Indicator-2 Capital to Asset Ratio
Formula: Capital / Total Assets
Standard: Capital Adequacy at more than 15%
Indicator-3 Operating expense/loan portfolio
Formula: Total Operating Cost / Average outstanding Portfolio
Standard: Operating cost ratio at less than 20%
Indicator-4 Operational Self sufficiency
Formula: Operating income (Loans + Investment) / Operating Cost + Loan Loss Provisions + Financing Cost
Standard: Operating Self- sufficiency at 100%
These indicators have been chosen based on literature review and the results of regression analysis of factors
affecting sustainability of Indian MFIs and Bangladesh MFIs.
The standards of each of the above parameters are taken from secondary source ACCION, RBI and Sa-Dhan.
Step-2: In the second step, a weight is assigned to each of these financial indicators. The weight has been assigned
analyzing the importance of indicators used by different microfinance research agencies worldwide.
It has been found, as shown in Table-5.9 that the indicator PAR> 30 days is most important as it is used by all 6
agencies. Similarly, the other indicators like Capital/ Assets ratio and Operational Self Sufficiency have got the
least importance as four out of six agencies are using them for the performance evaluation. Table-5.7 shows the
weight of each indicator.
Step-3: In the third step, each indicator has been given a range. These indicators have to be converted into same
scale so that a common measurable score, based on the financial performance of an MFI may be given to each
of these indicators for a particular year. The score of standard of each indicator has also been calculated based on
the scale.
Table-5.8 shows the range of indicators and the score of standards.
One year data on four indicators for the MFI have been collected and then converted into a common measurable
scale. This is necessary to give a score to an MFI on these indicators. A score to the standards of these financial
indicators will also be set.
Scaling for PAR: Since the standard is less than 10% and trend is decreasing therefore (100 – PAR) will be
considered for converting the data from 0 to 100 scales.
The same procedure will be applicable for Operating Expense to Loan Portfolio.
For other two indicators the scaling will be used as per normal standard as has been shown in Fig-5.1.
Step-4: In the fourth step, the total score of the standards is calculated by multiplying indicator’s weight with
score of indicator’s standard and adding it. The total score of the standards is considered as sustainability index
for the base year.
Total score of the standards = 90*W (PAR) +15* W (C/A ratio) + 80*W (Operating Expenses/Loan Portfolio) +
50* W (OSS) = 90*0.32+15*0.21+80*0.26+50*0.21 = 63.25 (score for the sustainability index for the base year
2010); Where W is weight
Step-5: In the final step, the sustainability score for Indian MFIs for the year 2010, using the sustainability
index model, is calculated. Top 10 MFIs of India, which contributes 80% of the total loan portfolio, have been
taken for the calculation of sustainability index (refer Table-5.10). The weight has been assigned to each of these
companies, based on their Gross Loan Portfolio. The weighted averaged sustainability index comes out to be
75.34 for the year 2010. It can also be used on single MFI to check whether, the MFI is financially sustainable or
not.
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Significance of the Model: This model of financial sustainability Index for microfinance institutions is more
comprehensive. With the help of this model, the MFIs can quantify the level of financial sustainability. This will
also be used to create a sustainability index for various countries and help the regulator identifying the strong
and weak areas of the sector. In addition, the existence of new model is also expected to facilitate MFIs to access
to capital markets. Having access to sustainability information may reduce some of the transaction uncertainty.
This model may be considered as one more step in the process of the emergence of the microfinance standards.
6. References:
Adongo, J. & Stork, C. (2005). Factors Influencing the Financial Sustainability of Selected Microfinance
Institutions in Namibia, NEPRU Research Paper 39.
Khandker, Shahidur, R., Khalily, Baqui & Khan, Zahed (1995). Grameen Bank: Performance and Sustainability,
Discussion Paper (306), Washington, D.C.: World Bank.
Meyer, R. L. (2002). Track Record of Financial Institutions in Assisting the Poor in Asia, ADB Institute Research
Paper (49).
Navajas, S., Schreiner, M., Meyer, R. L., Gonzalez-Vega, C. & Rodriguez-Meza, J. (2000). Micro Credit and
the Poorest Of The Poor: Theory and Evidence from Bolivia, World Development 28(2), Elsevier Science Ltd.,
pp. 333-346.
Srinivasan, N. (2010). Microfinance India. State of the Sector Report 2009, New Delhi.
Sa- Dhan (2003). Technical Tool Series 1: Tracking Performance Standards of Microfinance Institutions: an
Operational Manual, Sa- Dhan publication, New-Delhi.
Sa- Dhan (2005). Side by Side: a Slice of Microfinance Operations in India, Sa- Dhan publication New Delhi.
Sa-Dhan (2008). Tracking Financial Performance Standards of Microfinance Institution, An Operational
Mannual Technical Tool Series-1, Sa-dhan Microfinance Resources Centre. New Delhi.
Yaron, Jacob (1992). Successful Rural Finance Institutions, Discussion Paper (150), Washington, D.C., World
Bank.
Zeller, Manfred & Meyer R. L. (2002). The Triangle of Microfinance: Financial Sustainability, Outreach, and
Impact, s.n., Baltimore, USA.
Fig: 5.1 Scale of Financial Indicators:
PAR> 30 days
0 --------------------------------90---------100
Capital to Assets Ratio
0------15------------------------------------100
Operating expense/loan portfolio
0----------------------------80-------------100
Operational Self Sufficiency
0--------------------50---------------------100
Table- 5.1: Model Summary of Linear Regression for Sustainability of Indian MFIs
Std. Error of the
Model R R Square Adjusted R Square Estimate Durbin-Watson
1 .729a .531 .502 21.80319 2.113
a. Predictors: (Constant), Debt/Equity, PAR, BPSM, ACTB, WB, CA, YIELD, ROE, OELP
b. Dependent Variable: OSS
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Table-5.2: ANOVA (b)
Model Sum of Squares df Mean Square F Sig.
1 Regression 76518.310 9 8502.034 17.885 .000a
Residual 67503.808 142 475.379
Total 144022.119 151
a. Predictors: (Constant), Debt/Equity, PAR, BPSM, ACTB, WB, CA, YIELD, ROE, OELP
b. Dependent variable: OSS
Table-5.3: Coefficients (a) of Financial Factors affecting Sustainability of Indian MFIs
Standardized
Un-standardized Coefficients Coefficients Co linearity Statistics
Model B Std. Error Beta t Sig. Tolerance VIF
(Constant) 106.797 13.341 8.005 .000
ACTB 6.743E-6 .000 .160 2.710 .008 .945 1.058
WB -.086 .132 -.039 -.647 .519 .886 1.129
PAR -.486 .485 -.059 -1.002 .318 .958 1.043
ROE .034 .018 .139 1.915 .058 .624 1.603
BPSM -.011 .009 -.080 -1.254 .212 .808 1.238
CA .705 .175 .275 4.026 .000 .705 1.419
YIELD 1.914 .276 .470 6.926 .000 .718 1.393
OELP -2.789 .268 -.787 -10.417 .000 .578 1.731
Debt/Equity .032 .043 .057 .740 .460 .564 1.773
a. Dependent Variable: OSS
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Table-5.4: Model Summary of Linear Regression for Sustainability of Bangladesh MFIs
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .768(a) .590 .540 20.97656
a Predictors: (Constant), Debt/Equity, ACTB, C_A, Inception, PAR, YIELD, OELP, WB
b Dependent Variable: OSS
Table-5.5: ANOVA (b)
Model Sum of Squares df Mean Square F Sig.
1 Regression 41748.144 8 5218.518 11.860 .000(a)
Residual 29041.049 66 440.016
Total 70789.194 74
a Predictors: (Constant), Debt/Equity, ACTB, C_A, Inception, PAR, YIELD, OELP, WB
b Dependent Variable: OSS
Table-5.6: Coefficients (a) of Financial Factors affecting Sustainability of Bangladesh MFIs
Un-standardized Standardized
Model Coefficients Coefficients t Sig. Co linearity Statistics
Std.
B Error Beta Tolerance VIF
1 (Constant) 70.949 682.482 .104 .918
Inception .055 .351 .014 .158 .875 .744 1.344
ACTB 5.01E-007 .000 .035 .381 .705 .730 1.370
WB -.835 .553 -.152 -1.510 .136 .612 1.634
PAR -.493 .164 -.290 -3.002 .004 .664 1.506
OELP -1.466 .598 -.235 -2.451 .017 .674 1.483
C_A .778 .193 .400 4.024 .000 .629 1.591
YIELD 1.126 .643 .163 1.752 .084 .718 1.394
Debt/Equity .109 .223 .045 .488 .627 .737 1.358
a Dependent Variable: OSS
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Table-5.7: Weight for the Indicators
S. No. Indicators No. of agencies using Indicators Final weight
1 PAR>30 days past due 6 0.32
2 Capital to Assets ratio 4 0.21
3 Operational Self Sufficiency 4 0.21
4 Operating expense/loan portfolio 5 0.26
Table-5.8: Indicators Range and standard
Indicators Standards Score of
Range Standards
PAR>30 days 0– Less than or equal to 10% 90
100 %
Capital to Assets ratio 0 – 100 % More than or equal to 15 % 15
Operational self sufficiency 0 - 200 % Above 100% 50
Operating expense/loan portfolio 0 – 100 % Less than or equal to 20% 80
Table-5.9: Common measures of Financial Performance used by different agencies
Indicators ACCION MIX Planet SEEP WOCCU WWB
Rating Network
OUTREACH
1. No. of Active borrowers YES YES YES YES
2. No. of women borrowers YES YES
PORFOLIO QUALITY
1. Repayment rate YES
2. Portfolio at risk YES YES YES YES YES YES
3. Arrears rate YES YES
4. Loan Loss Rate YES YES YES
5. Loan loss provision rate YES YES YES YES YES
PRODUCTIVITY
1. No. of loan per credit officer YES YES YES
2. Amount of loan per credit officer YES YES
3. Ratio of credit officer to total staff YES YES YES
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EFFICIENCY
1. Cost per borrower YES YES YES
2. Cost per unit of money lent YES YES YES YES
3.Operational efficiency YES YES YES YES YES
4. Administrative efficiency YES YES
SUSTAINABILITY
1. Operational sustainability YES YES YES YES
2. Financial sustainability YES YES YES YES
PROFITABILTY
1. Return on assets YES YES YES YES YES YES
2. Return on equity YES YES YES YES
3. Yield on Portfolio YES YES YES
Table-5.10: Financial Sustainability Index for Indian Microfinance Institutions
GLP Weigh
CA OELP PAR OSS Million ted
SN MFIs CA Score OELP Score PAR Score OSS Score $ Weight Score
1 SKS 23.7 23.7 10.1 89.9 0.22 99.78 150 75 960 0.28 76.03
SPANDAN
2 A 16.7 16.7 5.4 94.6 0.13 99.87 180 90 787 0.23 78.96
3 SHARE 11.3 11.3 8.2 91.8 0.16 99.84 154 77 376 0.11 74.36
BANDHA
4 N 10.45 10.45 5.43 94.57 0.13 99.87 158 79 332 0.10 75.33
5 AML 11.1 11.1 6.34 93.66 0.77 99.23 146 73 315 0.09 73.77
6 BASIX 14.1 14.1 15.9 84.1 2.5 97.5 114 57 172 0.05 68.00
7 SKDRDP 4.8 4.8 4.8 95.2 0.31 99.69 112 56 136 0.04 69.42
8 EQITAS 36.5 36.5 8.1 91.9 0.11 99.89 145 72.5 134 0.04 78.75
9 GV 12 12 11.8 88.2 0 100 125 62.5 134 0.04 70.58
10 UJJIVAN 25.9 25.9 19 81 0.46 99.54 116 58 82 0.02 70.53
Total 3428 1.00
S. Index (2010): 75.34
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