Determinants of a successful microfinance ecosystem and their influence on Socio-economic development: evidence from Self-help groups in India

The article focuses on the factors of an effective microfinance ecosystem and how they affect socio-economic development of members of self-help group (SHGs) in India. According to survey findings of 756 respondents, Structural Equation Modelling (SEM) is used to analyze key constructs like engagement, financial inclusion, household economic security, entrepreneurship, and infrastructure. The findings reveal that financial inclusion, infrastructure and entrepreneurship have a significant positive impact on socio-economic development, engagement, and economic security have moderate positive impacts. The contextual challenge has a marginal negative impact. The results reveal the significance of financial access, digital infrastructures, and entrepreneurial support in order to maximize development outcomes. It contribute by providing empirically tested models that relate microfinance determinants with development and offers practical implications to policymakers on how to develop inclusive and sustainable microfinance plans that enhance the overall well-being.