CLIENT EXIT BEHAVIOR IN MICROFINANCE: A CASE STUDY OF BHAKTAPUR
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Abstract
People who lack capital are unable to invest in productive activities, run established firms, or even survive in society, severely limiting their opportunities to escape poverty. On the other hand, microfinance institutions have greatly contributed to improving people's living standards by increasing their income-generating activities through loans.The success story of microfinance programs can be found in numerous studies. Many
practitioners feel that the programs of microfinance can improve the lives of low-income families (Lensik et al., 2018). These studies show that microfinance clients experienced positive impacts on several levels. At the firm level, they contribute to capital accumulation and job creation (Swain et al., 2008). Finally, at the community level by hiring new workers in poorer groups.
Description
Microfinance systems aim to alleviate poverty and provide social protection to vulnerable individuals and groups. Traditional banking systems could not support microfinance systems. Its business model is based on traditional lending methods, which is an inadequate premise for microfinance borrowers. According to The World Bank report (2022), 56% women are working in Nepal. The majority of working-age women work in
the unorganized sector, which has terrible employment environments and salaries. Therefore, women's empowerment aspect of Nepal's microfinance is of great importance.