Review of Professional Management

Indian Microfinance Institutions’ Business Models: Evaluating Value Creation, Deliverance and Value Capture Dimensions

Aisha Badruddin¹

First Published 28 Oct 2025. https://doi.org/10.1177/09728686251384385

Article Information

Corresponding Author:

Aisha Badruddin, Department of Business Management, Integral Business School, Integral University, Kursi Road, Dasauli, Lucknow, Uttar Pradesh 226026, India.
Email: aishabadruddin@gmail.com

¹Department of Business Management, Integral Business School, Integral University, Lucknow, Uttar Pradesh, India

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

The research aims to evaluate the business models of microfinance institutions (MFIs). The major research question is as to what the performance of the MFI Business Model in India was during the COVID-19 situation. The secondary data from 2018 to 2021 is taken across the legal form of MFIs operating all over India. The variables studied include gross loan portfolio (GLP), operating expense ratio (OER), capital adequacy ratio (CAR), finance cost ratio (FCR), active borrower per credit officer (ABCO), return on assets (ROA), return on equity (ROE), YIELD, debt-to-equity ratio (DER) and active borrowers (AB). The statistical technique implemented in the research includes Kolmogorov-Smirnov, Shapiro-Wilk and Levene statistic for testing normality and homogeneity, one-way ANOVA and post-hoc multiple comparisons. The NBFC-MFI (Non-Banking Financial Company-Microfinance Institution) business model is found to be performing well as far as the value creation is concerned. On other dimensions of business model evaluation, that is, value deliverance and value capture, business models of all the categories of MFIs are similar. The result reveals status of business model on value creation, deliverance and capture dimensions during COVID-19.

Keywords

Business models, legal forms, value creation, value deliverance, value capture, NBFC-MFI and COVID-19

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