Dairy SHGs in Kerala: Economics and Loan Repayment Drivers

Microfinance activities play a vital role among the poor to raise their microenterprisesespecially in the primary agricultural sector of rural India and helped the marginalizedpeople to elude from poverty. This paper detailed the economic performance of dairy-based SHGs and discuss the factors that influence the repayment performance of the SHGsin Kerala. The study consists of a sample of 80 dairy SHGs which is situated at a highaltitude zone of Kerala where a large number of dairy-financed SHGs are existing. Theresults of economic performance analysis showed that the saving performance and repay-ment of the external bank linkage loans were quite impressive in the study area. However,the prompt repayment of internal loans lacking momentum. Results of Tobit regressionhave shown that peer pressure and dependency ratio have a positive influence, whereashomogeneity and loan amount has a negative influence on the repayment performance ofthe SHGs.