VIABILITY AND PRACTICES OF INTEREST-FREE MICROFINANCE IN THE STATE OF KERALA: AN ANALYTICAL STUDY BASED ON CUSTOMERS’ PERCEPTIONS
This is an empirical study on Interest-free (Islamic) Microfinance (IsMF) which is based on the Profit Loss Sharing (PLS) financial mechanism, conducted in the state of Kerala. In India, IsMF is at a nascent stage but many institutions have ventured into IsMF-type financial enterprises, especially after the recent microfinance crunch of 2011-12. This study explores the viability and practices of IsMF as an alternative to conventional microfinance in India. The main objectives of this study are to investigate the products and services of IsMF, to identify its operational methods and to analyse the perceptions of customers towards all these aspects. Both inferential and descriptive statistical methods have been applied for better results. The study has a sample size of 400 and it was found from the field survey that there are 9 products and services and 11 operational methods of IsMF in the surveyed areas. The outcomes of the survey reveal optimistic results towards all the factors which were tested to vindicate the objectives of the study. Customers have a good perception of almost all systems of IsMF in the state of Kerala.