Published Online:August 2026
Product Name:The IUP Journal of Bank Management
Product Type:Article
Product Code:IJBM040826
DOI:10.71329/IUPJBM/2026.25.3.58-83
Author Name:Sarada Prasan Mohanty, Samir Ranjan Behera, Rajib Sarkar and Silu Muduli
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:58-83
This study examines the issues and challenges faced by microfinance institution (MFI) borrowers in Odisha using primary survey data across five districts based on borrower and credit concentration. A stratified random sampling method was used for the survey. The questionnaire consists of five major sections: general information of the MFI borrower, membership details of MFIs, details of loan, awareness and transparency of loan contract, and issues and challenges.The findings reveal that while MFIs significantly enhance financial inclusion and livelihood opportunities, borrowers reported that they face relatively higher interest rates, loan processing fees, and, in a few cases, rigid weekly repayment schedules. The survey also highlights gaps in borrower awareness and institutional practices. The random forest analysis, an ensemble learning method that constructs a multitude of decision trees and aggregates their predictions, reveals that borrowers with higher loan amounts express concerns over higher processing and insurance fees.
crofinance institutions (MFIs), which originated in developing countries as a means of delivering financial services to underserved and low-income populations, is increasingly being recognized as a viable and profitable business opportunity (Mitra, 2009). The existence of microfinance is important in every developing country’s existing economic system as they help the poor people through various financial services (Asian Development Bank, 2000). The poor households possess no collateral to avail a loan from the bank; the bank provides a loan on a long-term basis with a lot of legalities involved. Since there are a lot of formalities to take care of and a lot of paperwork involved, the poor have no means to access this financial assistance provided by the bank (Armendáriz & Morduch, 2010).