GOVERNANCE AND REGULATORY ISSUES: MICROFINANCE AND DEVELOPMENT OF RURAL COMMUNITIES IN NEPAL

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Dilip Kumar Jha, Stuart Locke, Nirosha Hewa Wellalage

DOI:10.22495/cocv13i3c3p8

Abstract

Microfinance Institutions (MFIs) that have a mission to provide credit to the poorest of the poor appear to be the panacea for rural poverty and hardship and bring forward a promise of better tomorrows. However, MFIs as a means of expanding financial inclusion and competing with the informal financial sector are not such a success story in rural Nepal. The increasing demand for cash to meet social and religious obligations in largely subsistent village economies is increasingly supported by short-term seasonal migration. The removal of working-age males from communities produces a range of unanticipated and not necessarily desirable outcomes. MFIs, it is suggested, could ameliorate the problem and positively contribute to improved sustainable development outcomes.

Keywords: MFI, Seasonal Labour Migration, Nepal, Cash Need, Policy Implication

How to cite this paper: Jha, D. K., Locke, S., & Wellalage, N. H. (2016). Governance and regulatory issues: microfinance and development of rural communities in Nepal. Corporate Ownership & Control, 13(3-3), 491-501. http://doi.org/10.22495/cocv13i3c3p8