Nepal’s Central Bureau of Statistics (CBS) recently released the Nepal Living Standard Survey, which indicates that the percentage of households borrowing from local moneylenders has decreased from 40 percent to 15 percent since the last survey, which was conducted in 1995-96. Cooperatives and microfinance institutions (MFIs) have increased their market share from 3.3 percent of households to 14 percent over that time period. Relatives are playing an increasingly important role as sources of financial assistance, as 51 percent of households now borrow from family members – a 10 percentage point increase. The penetration of commercial banks has also been positive, increasing from 16 percent to 20 percent of households over the last 15 years. During that time, the total incidence of indebtedness has increased from 61 percent to 65 percent of households.
Financial institutions have also invested in infrastructure in an effort to make themselves more accessible to people in rural areas. Within 30 minutes of walking from their homes, 40 percent of people can now reach a commercial bank and 54 percent can reach a cooperative. These numbers have increased from 21 percent and 26 percent, respectively, since the previous survey.
As of 2010, 24 Nepalese MFIs reported to the US-based nonprofit Microfinance Information Exchange (MIX), serving approximately 750,000 active borrowers with an aggregate gross loan portfolio of USD 156 million.
By Rohan Trivedi, Research Associate
Sources and Additional Resources:
[1] The Himalayan Times: “Increase in financial access as banks go places”, http://www.thehimalayantimes.com/fullNews.php?headline=Increase+in+financial+access+as+banks+go+places&NewsID=298939
MicroCapital.org story, August 2, 2011: “MICROFINANCE PAPER WRAP-UP: Financial Access: State of the Art in Nepal, by Nari Hari Dhakal, Publish on the Microfinance Gateway”, https://www.microcapital.org/microfinance-paper-wrap-up-financial-access-state-of-the-art-in-nepal-by-nara-hari-dhakal-published-on-the-microfinance-gateway-2/
MicroCapital.org story, March 15, 2011: “MICROCAPITAL BRIEF: Rural Microfinance Development Centre (RMDC) Offers Seed Funding to Expand Microcredit into Remote Regions of Nepal”, https://www.microcapital.org/microcapital-brief-rural-microfinance-development-centre-rmdc-offers-seed-funding-to-expand-microcredit-into-remote-regions-of-nepal/
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