Understanding the Clients of Microfinance: A Household Level Study in Manipur

This Friends of Women's World Banking (FWWB) study examines socioeconomic characteristics of microfinance clients and dynamics of client households.

The study conducts a household survey of new clients of Weaker Sections Development Society Initiate (WSDS), a microfinance organization working in the hilly districts of Manipur, India. It aims to understand the nature and extent of credit need and the gaps in credit availability for households. Findings include:

• More than half of sample households were involved in agriculture;
• Income generation activities included weaving, running shops, pig rearing, trading, operating rice mills, hotels and tea shops;
• Assets included livestock, agricultural implements and tractors;
• Households typically spent 27% of their income on food;
• Other major expenditures included education and health;
• Farming generated less income than service and petty entrepreneurship;
• Only 161 of the 194 client households had borrowed during the year preceding the survey;
• Loan sizes varied between INR 1,000 and INR 5,000;
• Less than half the households borrowed to invest in a production related activity;
• About 25% households borrowed for consumption.

Finally, clients’ access to loan sources was limited. Self-help groups emerged as the primary source.