Data for: Debt Traps - A Risk Participative Approach for Reduction of Default Risk Using Numeric Game Theory

High-cost Microfinance, extended to tribal women is the chosen paradigm as merits of the credit programs are overshadowed by the perils of default i.e., when new business ventures are established and they fail (65-70%), it has a demonic effect on the already poor women subjecting them to social exclusion. This study asserts, Dr. Sen’s Capacity Building approach in the form a structured educational program prior to lending. The quantum of this problem is measured using NPA data collected from a tribal hamlet registered with Rs. 508.095 Crore NPA which is a consolidation of 1,328 tribal SHG groups comprising of 14,692 poor tribal women. Almost all the 14,692 tribal women are subjected to social exclusion and exposed to recovery teams of the lender, which is almost inhuman.

The study asserts that the unlike segregation into two groups, Government needs to segregate the beneficiary women into three groups Urban, Rural and Tribal. The Capability of the tribal group needs to be enhances by a possible structured training program prior to the extension of loans. As an indicator, the monthly repayment of the groups loan should not be over the total income of the group. Other identified variables, are modelled as Game Theory participants, yield tested using Mathematical Modelling and output measured using Numerical Analysis.

3. Major Novel Contributions

A. To ensure that default rate is lowered and capacity building is realized, the study has identified and modelled four key variables associated with poverty alleviation programs that involve extension of financial interventions, (a) Capacity to Repay, (b) Margin Requirements, (c) Forward Integration and (d) Market Conditions

B. A common objective of Risk Participation modelled as a transferrable constant from the borrower(s) to the lender i.e., to realize profit booking at the borrower(s) chosen activity the Lender is accountable and responsible to ensure that the business paradigm is analysed methodically and information supplied to borrowers

C. Over one Credit Cycle, especially for credit ventures in the tribal belts, Govt need sto roll-out a structured training program and assist tribal women not to be subjected to social exclusion which otherwise is not happening as on date.