Is Microfinance Service a Positive Sum Game ? A Qualitative Study on Financial Sustainability of Microfinance Clients

To explore the impact of microfinance on the financial sustainability of clients. The author set out to determine to what extent do the clients utilize the funds to gain and reinvest in the business to accomplish sustainability.The study is based on an in-depth interview which was conducted with microfinance clients. A qualitative approach was used to capture the data. In-depth interviews were conducted using Thematic analysis method and secondary data from microfinance office records to capture their practices in operational utilization of funds. The finding of the study shows that the loan amount was not fully utilized for specified purposes and was used to meet the basic needs and contingencies. The respondents were influenced and unbalanced during the utilization of funds. Most of them treat their debt as an additional source of fund to meet their family responsibility.

can be explored by following questions. RQ: How do the MFI clients use their loans? Is it effectively utilized for business purpose? Do they reinvest the returns for further growth and sustainability?
The magnitude of MFI impact on the client's financial sustainability via their cost and benefit analysis will deliver a solid guideline to the decision maker, policy maker, management and donor etc about initiation of innovative products to meet the real needs of clients. our research aims at a qualitative analysis to gauge the potential impact that the microfinance program may generate through in-depth and group-based interviews. Impact evaluation framework of MFI fig 1 Source: a handbook on impact assessment : A qualitative method

Methods
Researcher's objective to understand the financial sustainability of MFI clients. Various studies have given shreds of evidence that MFIs gives positive impact in their lives of poor as output and impact aspects are shown in the above framework (shown in fig 1 ) but fewer number of studies were conducted to find its impact on financial sustainability. The researcher has attempted to identify the gap in attaining financial sustainability by the clients through a qualitative method. In order to support research, aim this study undertaken using a qualitative approach to scale potential impacts that the program may generate through using in-depth and groupbased interviews. In other words, a qualitative inquiry that investigates a contemporary phenomenon within its real-life context is in order to allow an in-depth understanding of how MFI programs impact on the enhancement of financial sustainability of clients. In this research, the thematic analysis method was used along with three sources of evidence that are documentation, interviews, and records from MFIs .The researcher approached the management officials cluster heads, divisional managers of respective MFIs to conduct the study. A women group leaders were introduced along with the group members of that region at Kandhamal, Odisha state, India . Then reviewed publicly available information relating to the MFIs under study and some of their private records. In the second stage, the researcher visited the selected institutions which involved detailed discussions with loan officers. Then the arrangements were made by officials to meet the clients in the center meetings. Individual and group interviews were done at each visit in the field. MFIs and client information's were kept completely confidential. All the contributing MFIs were registered under NBFC-MFI and are incorporated under the companies act 1956 and registered as a non-bank financial company with RBI, like other companies incorporated under the company act. These NBFC work purely business lines laying emphasis on return on investment by "doing good business while extending microfinance to the poor" that is "doing well by doing good" is their motive.
Thematic analysis method was used to analyze the qualitative data which facilitated identification, analysis and reporting patterns as given by Braun and Clark's six phases in which codes were developed after examining the data. An advantage of this, particularly from the perspective of learning that it is a method rather than a methodology (Braun andClark 2006,2013) It means that unlike many quantitative methodologies it is not tied with a particular epistemological or theoretical perspective. The goal of the thematic analysis is to identify the themes i.e. pattern in data that are important.
In the first stage, the researcher began by familiarizing with the data, reading the whole data multiple times to establish meaning. Then note down the ideas about what is there in the data and the important focal points in that. In the second stage after generating the initial list, initial codes were assigned. Coding was done manually by writing notes and by using highlighters to indicate the potential patterns and identified codes were matched up  Vol.11, No.10, 2019 46 with data extracted from the individual transcript. In the third stage began when all data have been initial coded and collated, this entitles sorting the different codes into potential themes. The coded data were grouped into themes. The fourth stage involves the refinement of the theme. At stage five, the initial themes were defined identifying the essence of what each theme is about and determine which aspect of the data each theme captured. The sixth stage involves writing up the story, providing sufficient evidence of the themes within the data. (Braun andClark 2006,2013)

5.Data and analysis:
Demographic features of respondents: Three villages were selected based on the poverty status as reported by the cluster heads survey for investigating the impact on client's financial sustainability. Data were collected by the researcher during the field visit accompanied by cluster head and field officer after the center meeting for around 1 hour to 1 hour 30 minutes duration using face to face interviews. All sessions were conducted in local language odia. Questions were asked by the researcher for the individual in-depth interviews and data were generated, audiotaped and translated into English. At the beginning of the center, meeting oath was taken by both the loan officers and the client. After a week of training, the loan amount usually get disbursed to the clients. The sample size was 20 who engaged in various businesses like petty shops, tailoring, vegetable vendors, agricultural products, foodstuff retailing, idly batter shops, the small unit of use and throw plates manufacturing unit, poultry farms, milk dairy, tiffin centers etc. They were clustered into three focus groups with six, seven and seven in three groups and data were generated regarding operational utilization of funds shown in table 2. Husband has borrowed money and lost in fish farming business. Paying that dues from the returns of my business.

Invested in business
Returns were used to repay the dues not reinvested in the business.

6.Findings
The researcher has collected qualitative data which deals with words. After conducting an interview interim analysis which is a cyclical process of data collection and instant analysis was reflected which helped to record all the reflected data, thoughts, insights, throughout the collection and analysis process. Finally, the researcher collected data until no new thing emerged from the data.
The thematic analysis presented in table 2 shows the utilization of funds given by microfinance programs helped the clients in generating income for improving their standard of living, education, health and used for asset creation for future and also for meeting other family needs.During the interview process, it was observed that around 60 % of the respondents utilized fully in the business whereas rest were diverted it to meet their basic and contingency requirements.
Most of the respondents reported that they do not separate business money from their family uses. Only four respondents told that they maintain a separate account for the business and analyze the returns of their investments. Few respondents blindly decided to follow others and imitating others rather deciding their own independently. Several respondents expressed that they invest in their business without even calculating the cost and benefit of that avenue after all the deductions such as interest rates, tariffs, and taxes. One of the major findings was that respondents were biased about their financial decisions making. They were influenced by others to invest in a business without even studying local market needs.
It was observed that respondents were planned to purchase stocks for their business when its budget run out also. They borrow from other sources without constraining the other kind of purchases. That leads to overindebtedness. One of the respondents was worried about investing in higher risky businesses since she was not willing to take the risk. The result of the study shows that majority of the consumers are unanimous in their opinion that their business programs are not self-sustainable due to the diversion of funds towards present consumptions, repayment of old debts and low returns from their ventures were not sufficient to meet their basic needs. Only a few respondents were able to reinvest their returns in their businesses. Apparently, it was visible that majority of the respondents were not following a financial discipline. Merriam -Webster defined financial discipline is "how well we are able to confirm our saving to the plans that we set to accomplish our monetary goal." Money is fungible. According to the behavioral theory people are not rational in all the situation. They are carried away with their emotions and biases. Financial instability may arise due to this reason. There are many pieces of evidence where behavioral biases lead the individual to follow the ill-judged decisions of handling finance. (Tversky & Kahneman 1974;Baddley et al).
All the respondents were asked regarding the operational evaluation check. Operational evaluation means the effective implementation of the program in accordance with the initial program objective of MFIs. This evaluation is essential by all of the MFIs to seek whether implementation of microfinance program extended as planned. Specifically, it is a reflective assessment based on the program objective. As per the official records, it is mandatory to check after 21 days of the issue date, an operational evaluation must be performed by the loan officers regarding their investment in the various avenues.Researcher's enquiries were done based on the interviews with the MFI clients to check the appropriate utilization of funds in their businesses to identify the gap.It was observed that none of the loan officers were concern about the verification. Their only focus was on disbursement and collection of the loans.

7.Conclusion
There are very few studies that have measured the financial sustainability of MFI clients. while most of the studies done were focused on the financial sustainability of MFIs. In this paper, the researcher had tried to explore the reasons behind their financial instability with the help of thematic analysis method using qualitative data. It was clearly evident that MFIs were not focused on the utilization check rather they were only focusing on disbursement and collections of their loans. Due to this reason, the majority of the respondents were using it as additional finance for their family. However many studies revealed that microfinance is beneficiary for poor and some studies were found microcredit has a negative impact on poverty, whereby the poor household simply become poorer through the additional burden of debt (Hulme &Mosley 1996 ). The result of this study reveals that the impact of the MFI program can be enhanced more by giving stringent verifications on the operational evaluation of the funds. Though it shows a positive sign that many respondents are benefited from the program in terms of meeting their basic needs and were failed to reinvest the returns into the business for attaining sustainability. In this study, it was observed that individual MFI clients were not disciplined in utilizing finance. They were biased in handling finance . Unfortunately, saving can be hampered by the fact that they are not subject to limited control over their expenditure. Most of the incremental returns were also used for improving their livelihood rather were reinvesting into business for gaining sustainability.
"people in standard finance are rational. people in behavioral finance are normal" (Meir Statman). It's all about human psychology to deal with money. people show various behavioral biases like mental accounting bias, heuristics, loss aversion during their financial decision making. Emotions affect the financial decision making of individuals. The important conclusion of the study brings about the behavioral biases that the respondents were showing on their financial decision-making process. As the research paper is written with qualitative data with in-depth details of findings from the interview sessions with small sample size. For future researches, an empirical investigation can be adapted to investigating various biases shown by MFI clients and suitable training program can contribute to overcome these biases by adopting financial disciplines in utilizing money and which can create a difference in people's life.
The uniqueness of the microfinance system is that it recognizes the inability of the poor to provide tangible collaterals, therefore promotes collateral substitution for the small business entrepreneurs. If the loan amount and the opportunity for entrepreneurial activity appropriately utilized that may lead to permanent income by reinvesting in the business. If the clients follow disciplinary utilization of finance by employing stringent practices in handling day to day finance and put limits on their consumptions, achieving the sustainability goal is not so far.