Nepal: National Microfinance Policy, 2005

This document, that is part of the Tenth Plan of Nepal, presents the National Micro-Finance Policy, 2005 that views microfinance as a means of poverty alleviation. The document provides information about the background of the policy, including:

• The challenge that poverty poses to the economic development of Nepal;
• The role of microfinance in capital formation and the generation of self-confidence among destitute people.

It also argues for the need for the national microfinance policy, stating that:

• Institutions and programs working to alleviate poverty in Nepal need to operate in a more integrated and coordinated manner.
• A national policy would help:
  • Create opportunities for the development of entrepreneurial capacity of poor families;
  • Bring microfinance within the purview of a single law in order to coordinate and systematize the services.

The policy defines microfinance as the financial business of providing institutional financial services to the destitute and low-income families desirous of operating self-employment enterprises and outlines the policy:

• Nature, stating that the policy will prove helpful to enact a law that defines the term microfinance at the national level;
• Scope of operations that will include micro-savings, microcredit, micro-insurance and money transfers;
• Six objectives that cover poverty alleviation, formulation of laws, operation of employment generation programs, etc;
• Polices and strategies regarding the role of the central bank, the law relating to micro-businesses, etc; 

The document concludes by discussing resources available to the National Microfinance Development Fund.