Insights into Customer Perspectives: Lifestyle and Wellbeing Changes Post NBFC-MFI Loans under RBI

Abstract

Purpose - This study aims to explore the impact of Non-Banking Financial Company Microfinance Institutions (NBFC-MFIs) loans on the economic and social aspects of individuals' lives in Punjab and Rajasthan, India.

Design/methodology/approach - The research employed a Likert scale to assess MFI client perspectives and utilized purposive sampling in Rajasthan and Punjab studies. Statistical techniques such as paired T-tests and Factor Analysis were employed for comprehensive data analysis.

Findings - The research uncovered notable enhancements after borrowing, such as higher income, improved savings habits, and enriched family dynamics. Empowerment factors—Personal, Economic, Family, Social, and Financial—emerged through factor analysis. Exploratory factor analysis pinpointed responsiveness, prompt service, and convenience as factors shaping customer perceptions.

Practical implications - The study's findings underscore the importance of prioritizing responsiveness and technology investment by NBFC-MFIs, along with promoting regulatory clarity to ensure equitable access to microfinance services and foster socio-economic development.

Originality/value - This research offers empirical evidence of the concrete impact of NBFC-MFI loans on customer lifestyle and perceptions, providing valuable insights for stakeholders involved in microfinance initiatives and contributing to the discourse on poverty alleviation and social inclusion.