MIX Microfinance World: State of Social Performance in Nepal

Examining the social performance of MFIs in Nepal
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This article reviews key findings from new data on social performance of MFIs in Nepal. A surge in the number of Nepali MFIs reporting social performance to Microfinance Information Exchange (MIX) in 2011 prompted the article.The article identifies capturing and reporting social outcomes related to specific development goals as the principal challenge facing Nepali institutions. Findings include:

  • Nepali reporting on outcomes related to development goals lags behind regional rates and those in other parts of the world;
  • Nepali MFIs cite financial inclusion and poverty reduction as their most important social goals;
  • Regarding financial inclusion, Nepal's MFIs do well with respect to product and service diversity but fall short when it comes to extending these services to the unbanked;
  • Lack of client poverty data prevents any conclusions about Nepali MFIs' success in meeting their goal of poverty reduction;
  • Gender dimension of Nepali microfinance operations is perhaps the sector's greatest social performance management strength;
  • Nepali MFIs should focus on upgrading their existing management information systems in order to better capture and track social data.

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