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Three Decades of Microfinance: a Phase of Women Empowerment and Social Transformation

Microfinance has completed a three-decade long journey in Nepal. With continuous campaigns, it had brought awareness among the poor women in rural Nepal. Microfinance practitioners have been motivating women to run micro businesses by promoting them with access to saving and credit. The loans availed by the members are fully utilizing in their dream projects/businesses which benefited the entire family and the loan repayment rate was 100 percent.

The women involved in microfinance have made remarkable progress in their social, economic, educational, and even political fields. The speaker present in the webinar organized by CSD on July 18, 2021 (Shrawan 03, 2078) opined that microfinance has played an important role in the empowerment and transformation of the bottom level poor women in rural Nepal.

Addressing the webinar, Mr. Shankar Man Shrestha, Chairman of CSD, said “Microfinance has brought an immense change in the living standards of women and raised their level of consciousness and self-confidence. It has an environment for women to come out of the four walls of their house and get together to discuss business related issues of their social and economic activities. Microfinance has led a way for women to become micro entrepreneurs and freed them from depending on their spouse for a small amount of money.”

Mr. Shrestha added microfinance provided them access to money which is usual to start a business. Credit facilitated them to become entrepreneurs.  They are more disciplined than their male partners so far repayment is concerned. However, many women have been fallen into loan traps of irresponsible microfinance practitioners who are noncore after profit.    Detailing his points of view Mr. Shrestha further added “In a country like ours, microfinance plays a pivotal role in poverty alleviation and social change. So, Microfinance was initiated as a social business, but it is moving towards commercialization. Making a profit is a must for the sustainability of the organization, but must not get too commercialized. Its prime concern should be the socio-economic uplift of the poor and marginalized segment of the people.”

One of the speakers of the webinar, Ms. Shova Bajracharya, the Chief Executive Officer of Manushi Laghubitta Bittiya Sanstha Ltd. said “Microfinance has made women financially strong and respectful in the society. They have become in charge of the finance matter in the family. Microfinance has made it possible for the women to break the chain of social taboo within the family where they had sought permission of partner every small thing; now they could make their own decisions.”

Ms. Bajracharya also added “However, lately it seems we have drifted from the philosophy and principle of microfinance. The Poor and the disadvantaged segment of the society are getting excluded from the state services, this should not happen.”

Another speaker of the webinar, Ms. Asmani Chaudhary, Chairman of the Grameen Mahila Utthan Kendra, said “Due to microfinance women have achieved immense success in their social and family life. Numbers of poor women who were earlier confined to their homes have been able to be actively involved in organizing into groups and meet through fortnightly in their monthly center meetings where they share their knowledge and their business experiences. Through this process, they reached in the economic sector and self-confidence level has been enhancing as well as their saving habit and leadership capacity has developed. Nowadays about 50 members of my organization the Grameen Mahila Utthan Kendra also are representing in the local government. Many women have succeeded in engaging their husbands in self-employment through running their own enterprises. Gradually microfinance members are getting self-reliant in a number of matters. There is a great reduction in the incidence of domestic violence against women.”

Another speaker of the webinar, Ms. Maiya Rai, District Chief of the Jeevan Bikas Laghubitta Bittiya Sanstha Ltd. said “Initially the women were shy and scared to talk and with outsiders but after the numbers visited their home, they get the courage to talk and share their thoughts. Microfinance service has reached out to poor families and improved their confidence level, education, and health. Families also have improved a lot after they were oriented on the consciousness of health, sanitation, and hygiene. Once in our branch in Bhadrapur, Jhapa district repayment and default had reached an extreme level due to multiple financing. There was a revolt by the borrowers. However, we were able to convince them and showed them the right direction. We resolved the problem by sensitizing the members that they should not misuse loans and borrow loans only according to the needs and ability to pay and we even learned a great lesson that the MFIs sector shouldn't results in over indebtedness. Now the people perceive MFIs as change agents and have become friendly.”

Ms. Maiya Rai further added, “Unhealthy competition, an overburden of debt, and forceful extortion are some of the problems that were encountered in the beginning. In some places, members have even committed suicide. We need to learn a lesson from our past mistakes.

Moderator of the webinar Ms. Sharada Pokhrel, Chief Executive Officer of the Upakar Laghubitta Bittiya Sanstha Ltd. said, “MFIs had been instrumental in empowering the rural women in Nepal. It transforms them into entrepreneurs from housewives. There is seen a remarkable change in the status of women now.”  The webinar recorded the participation of 110 officials from the microfinance and banking sectors.

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