Paper

Reaching Poorest of the Poor: Building Inclusive Microfinance

Paper presented at the Microfinance Summit, February 14-16, 2008, Kathmandu, Nepal
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This paper discusses how microfinance can contribute to financial inclusion in Nepal and offers recommendations on increasing MFI outreach and sustainability. Poverty in Nepal is multi-dimensional and is exacerbated by geographical remoteness and ethno-caste hierarchy. Government interventions to curb poverty have not really succeeded. Despite MFIs efforts to increase outreach, their presence is limited to the less poor, geographically accessible, urban and semi-urban areas. Global Microcredit Summits have focused on increasing microfinances effectiveness as a poverty alleviation tool. They have helped practitioners discover that reaching the poorest of the poor includes overcoming physical, social and economic barriers. Recommendations to increase microfinance's outreach and sustainability include:

  • Linking microfinance and the mainstream financial sector;
  • Developing an inclusive financial sector as part of national development strategy;
  • Introducing remittances and insurance into microfinance operations;
  • Shifting from a project approach to an institutional development approach;
  • Increasing foreign direct investment in microfinance;
  • Developing a national microfinance policy that is inclusive;
  • Upscaling MFI operations.

About this Publication

By Bahadur, M.
Published