Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253831 
Year of Publication: 
2022
Citation: 
[Journal:] Margin: The Journal of Applied Economic Research [ISSN:] 0973-8029 [Volume:] 16 [Issue:] 2 [Publisher:] SAGE [Place:] New Delhi [Year:] 2022 [Pages:] 183-202
Publisher: 
SAGE, New Delhi
Abstract: 
The overall ratio of non-performing assets (NPAs) to total advances (the NPA ratio) extended to self-help groups (SHGs) has historically remained below 8 per cent in India. However, in the central, northern, and north-eastern regions of India, this ratio is relatively high and has remained above 15 per cent since 2015–2016. Using state-level data, the study identifies SHG-specific and state-specific factors that might be responsible for higher NPAs ratios. It also examines whether higher NPAs constrain access to future credit. Spatial analysis confirms the existence of geographical clustering of NPAs in the northern and central regions of the country. SHGs with lower outstanding loans and lower savings are more likely to default, the relationship being stronger in states with higher NPAs. The article finds that states with higher SHGs densities, per capita incomes, and road and railway connectivity, and lower infant mortality rates have lower NPAs in their SHGs. SHGs with lower savings and higher NPAs operating in states with lower per capita incomes and banking penetration face difficulties accessing fresh credits.
Subjects: 
Self-help groups
Non-performing assets
Bank credit
JEL: 
G21
O18
R51
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
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