📄 Abstract
Achieving the Sustainable Development Goals (SDGs) by 2030 requires both more capital and better-allocated capital. India operates the world’s largest microfinance system, making it an instructive case for sustainable-finance allocation. The Indian randomised controlled trial record reveals an underexploited pattern: credit-only interventions raise enterprise investment but not children’s education; group-formation interventions do the opposite; only combined interventions move both. We formalise this pattern with a household production model in which credit liquidity and group infrastructure are distinct inputs whose relative importance varies by outcome. We then introduce an evidence-rupee gap diagnostic that compares where capital flows to where rigorous causal evidence supports impact claims. Three sectoral analyses follow. First, a decomposition of FY20-FY24 portfolio growth attributes 47% to per-borrower deepening, 37% to new borrowers, and 15% to interaction. Second, the diagnostic yields a sectoral mismatch of 0.35, driven by income-generation lending where average causal effects are modest. Third, FY25 data show a sharp channel reversal, the MFI/JLG channel contracted by 14% while SHG-BLP grew by 17%. The framework supports rebalancing Priority Sector Lending incentives toward channels with the strongest India-specific evidence, and commissioning the primary research the income-generation channel still lacks.
🏷️ Keywords
📚 How to Cite:
Chetna Grewal , Ashok Kumar Gupta , CAPITAL, GROUP STRUCTURE, AND THE SUSTAINABLE DEVELOPMENT GOALS: A PRODUCTION-FUNCTION FRAMEWORK FOR INDIA’S MICROFINANCE SECTOR , Volume 13 , Issue 8, August 2026, EPRA International Journal of Economics, Business and Management Studies (EBMS) , Pages: 254 - 270 , DOI: https://doi.org/10.36713/epra28915