Investigated Study on Shaping the System of Personal Loans in India: with Special Reference to Informal Workers of Madras Province, Chennai, India

Abstract

The study aimed to bridge information gaps and unravel the complexities of asymmetric information in personal loans among Madras's informal workers. A field survey was conducted among informal sector workers in Madras, revealing that 76.9% had obtained a personal loan in the last decade. Of these, 63.06% were employed in the private sector, while the remaining 36.4% were engaged in public-private partnerships or government sectors. The study was primarily located in Madras (now Chennai), leveraging its rich history of trade and commerce and its status as a major industrial and commercial centre. The research findings are expected to contribute valuable insights to the discourse on personal loans in the informal sector, particularly in the context of customer satisfaction, micro borrowing, loan defaults, and the impact of personal micro credit. Based on the findings, the study proposes suitable policy recommendations to address the identified challenges and improve access to personal loans for informal workers in Madras. These recommendations aim to enhance transparency, reduce information asymmetry, and foster a more inclusive and equitable financial ecosystem.