Institutional finance in Mizoram: Growth, challenges and government initiatives

Abstract

It has been found that Mizoram has comparatively less number of branches of banks and automated teller machines (ATMs) than the other states in the region. The least number of people served per branch in Mizoram. The majority of the branches of banks and automated teller machines exist in the Aizawl district. North-East Small Finance Bank, Mizoram Rural Bank, and MCAB Ltd. have a higher credit-deposit ratio as compared to the commercial banks (public and private). Banks achieve the target credit amount in the Micro, Small, and Medium Enterprises sector, but are unable to fulfill the target amount in other sectors, such as agriculture, crop loans, and other priority areas. The corporate sector in Mizoram faces many challenges and opportunities. Most bank branches are located in urban areas, and many villages lack financial services. Some of the most common problems faced by the banking sector are cybersecurity, proper financial management, changing customer needs, adapting to technological developments, increasing competition, and instability of business. New Economic Policy refers to the use of structural reforms to improve the economy. It aims to increase global competitiveness by removing rigidities across different sectors. Therefore, the state government should implement proper policies for mitigating such challenges and expand banking facilities in the more interior areas of the state. The objective of the article is to examine the growth, challenges, and Government initiatives on institutional finance in the state of Mizoram.