Published Online:July 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP110725
DOI:10.71329/IUPJARAP/2025.24.3.217-236
Author Name:C Anita and D Sreenivasa Chary
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:217-236
The Indian microfinance sector, in the early 2000s, witnessed the emergence of Non-Banking Finance Company-Microfinance Institutions (NBFC-MFIs). Numerous NGOs embraced the concept of structural transformation and converted into more regulated NBFC-MFI institutions, aiming to reduce operational costs, enhance financial stability and promote sustainability. According to Sa-Dhan’s database, as of September 2018, there were 16 NGO-MFIs operating in South India that were subsequently reclassified as NBFC-MFIs by the Reserve Bank of India (RBI). Among the four NBFC-MFI institutions with relevant and reliable secondary data, BWDA Finance Limited (BFL) in Villipuram, Tamil Nadu, was selected for the study. The six key performance indicators assessed the overall growth and performance of the microfinance sector. A total of 17 distinct ratios were calculated over a decade to evaluate the performance of the institution. The results indicate that BFL possesses the capacity to effectively leverage and deploy capital for Gross Loan Portfolio creation. It has successfully expanded its client base and increased the volume of loans disbursed. Moreover, by adeptly managing its assets and liabilities, BFL demonstrated robust capabilities to absorb loan losses and exhibited encouraging signs of recovery. BFL has effectively transformed into a prominent NBFC-MFI, ensuring the sustainability of its operations and achieving noteworthy financial advancement.
Financial inclusion and sustainable development goals (SDGs) serve as principal catalysts for the majority of developing economies, and literature acknowledges the critical role played by microfinance institutions (MFIs).