Abstract
The purpose of the paper is to highlight the opportunities and challenges faces the microfinance sector in Nepal. Many developmental programs implemented in Nepal, microfinance programs have a strong rural orientation and are targeted at the poor. Numerous challenges are ahead of this sector like lack of accessibility, unhealthy competition, seasonal migration, political unawareness, excluding vulnerable groups, threatening the financial discipline, resource constraints, low level of knowledge. of micro finance institutions (MFIs) etc. On the other hand, the rapid increase in poverty in Nepal, along with other opportunities, is paving way for the growth of this sector and offering a huge market potential for microfinance. On this basis the sector presents a lot of opportunities such as: stimulating growth of economy, women empowerment, increasing volume, accessibility and outreach, economics of scope etc.Int. J. Soc. Sc. Manage. Vol. 5, Issue-3: 72-75
Highlights
Microfinance is the provision of financial services to lowincome clients, including consumers and the self-employed, who traditionally lack access to banking and related services
It is a movement whose object is “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit and savings, insurance, and fund transfers”. Those who promote microfinance generally believe that such access will help poor people out of poverty
Instead of the exclusive financial systems that have for decades benefited and protected the wealthy, microfinance intends that they serve the impoverished majorities, help lift them out of poverty, and make them full participants in their country's social and economic development
Summary
Microfinance is the provision of financial services to lowincome clients, including consumers and the self-employed, who traditionally lack access to banking and related services. Microfinance helps the working poor to establish or expand small businesses that generate additional income for the family use. Different factors have significant effect on low loan recovery rate These factors include borrower’s wrong attitude repayment, microfinance institute staff’s weak skill, corrupt tendency and poor infrastructural provision by the government. These factors has a direct impact on NPLSs (nonpayment loans) and on micro credit services (Anayo, 2011). INAFI SAP-Nepal (2004) Microfinance enabled the poor to enhance their access to financing for income growth and welfare improvement through micro-enterprise development and increased ability to address vulnerability and economic empowerment; Microcredit was used for production (66%) and the remaining for consumption. There is great need to expand the MFIs in high hills and mountains, where the majority of poor lives
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