CHAPTER I: INTRODUCTION

1.1 Background of the study

Seminar and training is the essential part of MBA program, which partially fulfill
the requirement of the masters level students about the practical learning
experience on collecting, processing, analyzing information and draw some
conclusion on particular field. The seminar on Impact of Microfinance on
Economic Development was conduct from 18th Jan 2015 to 26th Jan, 2015. The
seminar course gives student an opportunity to gain the details of what
microfinance is and impact of micro finance in economic development of the
society. I gained real life experience by conducting research. It is really one of the
appreciable tasks that Purbanchal University does. Through, we did group
discussion, presentation on microfinance and the seminar program was totally a
new and remarkable experiences. It is the only way to get the knowledge of what
actually the work place is and how the work is done. This seminar let us expose in
the society, teaches how to find the real impact of microfinance in the society,
apply our theoretical knowledge in practical life and finally its a way to prove
ourselves and prepares us for the research work.
I am highly motivated by this seminar and prepared a report on Impact of
Microfinance on Economic Development. This report is the essential part of
MBA program, which partially fulfillment of the seminar course requirement for
the degree of MBA .This report is about the practical learning experience on
collecting, processing, analyzing information and draw some conclusion on
particular field.

1.2

Objectives the study

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This report analyzes the impact of microfinance in economic development in the

society. Furthermore, objectives are more generally suitable to the research
community as evidence of the researchers clear sense of purpose and direction.
So in the light of the research tropic, the objective of this study is to show how
microfinance works, by using group lending methodology for reducing poverty
and how it effect the living standard (income, expenditure, saving access to food,
health, education etc) of the poor people in Lekhnath Municapility. To achieve
this basic objective the following specific objectives have been considered in the
study:
1. To analyze the impact of microfinance in economic development.
2. To examine the socioeconomic status, living standard of the people with the help
of income and expenditure pattern.
3. To examine the role of micro finance institution in empowerment and poverty
alleviation of the poor people in Lekhnath Municipality, shishuwa.
1.3

Statement of the problem

The main attempt of this study is to answer the following questions.

1. How the Microfinance impacts on economic development of Lekhnath
municipality , Sishuwa?
2. What is the impact of Microfinance on socioeconomic condition and living
standards of people in Lekhnath Municipality, sishuwa?
3. How the Microfinance Institution helps in Empowerment and Poverty
alleviation?

1.4

Scope of the study

Many genuine research works have been done in this related field. While in a
process, this is another effort to fulfill the gap that has been left by other
researcher and to contionue their genuine work.
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1.5

Study Methodology
1.5.1 Approach of the Study:
Research methodology is a systematic means of solving the research problem. It
includes sets of components covering research design, tools and methods chosen
to investigate the problems. The main objective of the study is to examine the
impact of microfinance in the development of the people lives in Lekhnath
Municipality ward no. 8,shihuwa. To obtain relevant qualitative and quanititative
data, the following methodology has been employed, which are the essential for
this research purpose.
1.5.2 Study Design:
According to Kothari (1989), research design is the arrangement of condition for
collection and analysis of data in a manner that aims to combine relevance to the
research purpose with the economy procedure. It is the plan structure and strategy
of investigation conceived so as to obtain answers to research question and to
control variance. To achieve the objective of this study, Descriptive and Analytical
research designs have been used. This paper aim to analyze the economic impact
of the respondents with the help of some determinant variables:

household

income, household consumption, Savings, household assets, improvement in

living standards, accessibility to credit, initiation of income generating activities.
Both qualitative and quantitative approaches were used for data analysis. The
study has analyzed and compared various indicator of economic status of loanees.

1.5.3 Sampling Design

The present study is an economic impact study of microfinance program of
chemiki Lagubitta sanstha in Sishuwa of Lekhnath municipality, Kaski district..
The study has been conducted to examine and compare the conditions of
respondents (loanees) of the microfinance program before and after being a
member of Chemiki Lagubitta Sanstha (CLS).
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The word loanees stand for loan users and non-loanees stand for savers only. The
study has also examined the respondents before and after conditions of the health
and education level of their children.
1.5.4 Size of Sample
There are 3 centers (Chemiki Lagubitta Sanstha) within the Sishuwa ward.
Among the 120 members in the 3 centers, 90 were loanees and 30 were nonloanees. Sample comprises all 3 centers of the Sishuwa ward of Lekhnath
Municipaity. A 50 percent of the total population has been taken as a sample. The
sample size was 60 which included both 50 loanees and 10 non-loanees. The
information was taken within 5 days period from January 20, 2015 to January 25,
2015. Microsoft excel, calculator been used to calculate values and t-test.
1.5.5 Sources of Information:
In social science research, field work is the central and important method for
collecting the primary information. Secondary information also plays an
important role while analyzing and giving inference of some empirical knowledge
(Adhikari, 2011). The study is based on various indicators of economic status of
household. As far the primary data is concerned, structured questionnaire was
used to collect data. Primary and secondary data both qualitative and quantitative
approaches were used for data analysis. Various data and information are
collected from the periodicals, economic bulletins, journals, magazines and other
published and unpublished report document from various sources are also been
used.
1.5.6

Work Schedule

20th Jan , 2015

22nd Jan, 2015- 25th Jan, 2015
26th Jan,2015
27th Jan, 2015
28th Jan, 2015
29th Jan, 2015
30th Jan, 2015

Preparation of questionnaire
Field questionnaire Survey , Primary Data collection
Written of preliminary part of report
literature review and preliminary data analysis
Data Presentation and Analysis
Written of Conclusion and recommendation
Revising, preparing list of works cited, editing , presenting
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1.5.7

Data Presentation and Analysis technique

The data collections during fieldwork have been thoroughly analyzed. To achieve
the objective of the study various financial and statistical tool have been used. The
analysis of the data has been done according to the pattern of the data available.
Data collected has been brought under statistical scrutiny after the raw data is
edited, coded and tabulated. Data has been analyzed in descriptive form.

1.6

Literature Review
This part reviews the related studies; Definition and Key Concept of
Microfinance, Microcredit, Microfinance Institutions, Empowerment, Poverty;
Impact of Microfinance, conceptual review and research review. Conceptual
review covers the concepts of basis terms used in the study and research review
includes the reviews of article published in different journals, dissertations,
reports and other related published and unpublished materials.

1.6.1 Definitions and Key Concept

Microfinance:
Microfinance is a simple but effective credit tool that enables the most poor to
pull themselves out of poverty result. It provides self-employment opportunity
for poor people who are unemployed, entrepreneurs and farmers who are not
bankable because of the lack of collateral, very low level of income. It has
successfully enabled poor people to start their own business generating income
and often beginning to build up wealth. It has the capacity to enhance the socioeconomic development of the vulnerable and marginalized people, especially
women.
Microcredit, or microfinance, is banking the un-bankable, bringing credit,
savings and other essential financial services within the reach of millions of
people who are too poor to be served by regular banks, in most cases because they
are unable to offer sufficient collateral. In general, banks are for people with
money, not for people without(Maanen, 2004). Microfinance has emerged as an
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effective poverty alleviation tool because it is based on the fundamental principle

that human beings are motivated to do whatever it takes to make themselves as
well as possible. (www.grameen-info.org/bank/).

Micro-credit:
It is a component of microfinance and is the extension of small loans to
entrepreneurs,
Who are too poor to qualify for traditional bank loans. Especially in developing
countries, Micro-credit enables very poor people to engage in self-employment
projects that generate income, thus allowing them to improve the standard of
living for themselves and their families.

Micro finance Institutions (MFIs):

A microfinance institution is an organization, engaged in extending micro credit
loans and other financial services to poor borrowers for income generating and
self-employment activities. An MFI is usually not a part of the formal banking
industry or government. It is usually referred to as a NGO (Non-Government
Organization).
Empowerment:
Empowerment refers to increasing the spiritual, political, social and economic
strength of individuals and communities. It often involves in developing
confidence of the individual in his/her own capacities. It has different meanings in
different social, cultural and political contexts. It indicates the expression of selfstrength, control, self-power self-reliance, freedom of choice and life of dignity, in
accordance with ones values, capable of fighting for ones rights, independence,
own decision making, being free, awakening, and capability. Empowerment is
relevant at the individual and collective level, and can be economic, social, or
political.
Poverty:
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Poverty is a condition in which a person of community is deprived of the basic

essentials and necessities for a minimum standard of living. Since poverty is
understood in many senses, the basic essentials may be material resources such as
food, safe drinking water and shelter, or they may be social resources such as
access to information, education, health care, social status, political power, or the
opportunity to develop meaningful connections with other people in society.
According to the World Banks (1980) definition of poverty, A condition of life
so
characterized by malnutrition, illiteracy, and disease as to be beneath any
reasonable definition of human decency.
What do we mean by impact of microfinance in economic development of
people?
Impact is about understanding how financial services affect the lives of poor
people. To date, most impact assessments have focused on microcredit programs
rather than looking at a range of financial services.
Impact considers income growth, asset building, and reduction of
vulnerability.
Impact indicators extend beyond enterprise measures (assets, employment,
revenues) to include multiple dimensions of poverty, including overall
household income, social improvements in health and education, and
empowerment (in terms of increased self-esteem and control of household
resources among women).
Simojoki (2003) analyzed the impact of micro-finance and opportunities to female
micro-entrepreneurs in the informal sector in Nairobi, Kenya with the objective of
clarifying how micro-entrepreneurs have benefited from credit and financial
services. The study showed the inter-relationship among social and economic
empowerment. Income generating activities were necessary for women. Control
over credit and business has shown as an important indicator of empowerment.
Related activities play an important role for the success of any microfinance
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program and their ability to contribute to women empowerment. Microfinance with

neo-liberal priorities could help them for self-confidence and substantial tools to
improve their lives. The most important part in effective microfinance is womens
participation and the strengthening of their sense of responsibility. The author
suggests that an explicit policy of empowerment and related activities need
microfinance programs for women empowerment. The government should promote
various opportunities and fight against the exploitative features of the informal
sector.
INAFI SAP-Nepal (2004) conducted a thematic research study on the Impact of
Microfinance Services on Poverty Reduction in Nepal. The main objective of the
study was to find out the overall impact of microfinance services on poverty
reduction in the country. The study focused on (i) outreach of microfinance, (ii)
access, use and contribution of microfinance, (iii) micro-enterprise development,
(iv)managing risks and vulnerabilities by clients, (v) empowerment of women, and
(vi) poverty reduction.
Bashyal (2005) studied and evaluated the impact of microfinance program on
poverty reduction in her Ph.D. dissertation entitled Impact of Microcredit
Programs on Poverty Alleviation in Nepal: A Case study of Rupandehi District.
She gave more emphasis on her study that women will not be empowered until and
unless they get benefited both qualitatively and quantitatively with the promotion
of gender equality. Overall objectives of the study were to evaluate the socioeconomic impact and implications of microfinance on poverty alleviation through
empowering women, and also evaluate the impact on natural resource management.
The Nirdhan Utthan Bank Limited (NUBL) situated in Rupendehi district,
Bhairahawa, was selected for the purpose of case study. This study assumed that
microfinance can reduce both income and human poverty over a period of time. If
women are empowered economically and socially, they can increase their skill and
confidence level to think of themselves as equal to men.

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Both primary and secondary data were used for the analysis. In the study, both
before and after and with and without approaches were used. The major finding
of the study was the positive impact of microfinance on poverty reduction.
Microfinance enabled the poor to enhance their access to financing for income
growth and welfare improvement through micro-enterprise development and
increased ability to address vulnerability and economic empowerment; Microcredit
was used for production (66%) and the remaining for consumption. Microfinance
contributed to reduce poverty in client households. Respondents increased their
incomes by 56 percent after participation in the microfinance programs.
Beneficiaries have increased slightly more financial, physical and human capital
than non-clients; Microcredit has served to lessen their dependency on
moneylenders, reducing the average interest rate burden especially for the poor;
Microcredit has promoted micro-enterprise activities, which in turn have increased
wage and self-employment opportunities for the beneficiaries and the community
people. There is great need to expand the MFIs in high hills and mountains, where
the majority of poor lives
Shrestha (2010) analyzed the Microfinance and social Mobilization in the context
of ADBL (Agricultural Development Bank, Nepal) in promoting SFCLs (Small
Farmers Cooperative Limited) in his book entitled Financial Performance of Small
Farmers Cooperative Limited in Nepal. Considering the positive outcome of
SFDP in terms of targeting the poor for their overall well-being, expansion of the
program was highly demanded in rural Nepal to deliver services to the poor and
disadvantaged groups. Social mobilization is also equally required in order to
improve and maintain the better financial performances of SFCLs.
Microfinance and its contribution in the economy are significant. This sector
contributes to reduce poverty, unemployment and inequality. This sector is self
employment generation and tries to raise leaving standard of people. Very few
researches have been carried out in the case of developing countries like Nepal. But

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some effort has been made to find out the problem and these efforts are not
sufficient. So a fresh and new research is significant.

1.7

Limitation of the Study

There are number of limitations in this study. Firstly, the respondents were limited
(109 respondents or samples) in terms of size and composition. Secondly, the data
collection was restricted only within the Lekhnath Municipality, which may fail to
represent the actual scenario of the whole country. While interviewing the people,
we have faced problems in explaining the questions as most of the people, who are
involved in microfinance program, are illiterate and living in villages. Therefore, it
was too difficult to make them understand some of the technical terms: like capital,
income etc. Moreover, theories were other problem when we wrote the theoretical
framework. Because, no established theories were particularly defined in
microfinance field yet. Grameen model has been used as an ideal theory for
microfinance. Besides this, some other related things to microfinance like, saving
mobilizations, solidarity, etc. were also used in theoretical framework. Finally, the
accuracy of the analysis heavily relied on the data provided by the people involved
in microfinance program in Nepal.

1.8

Organization of the Project Report

The study will be organized into 3 chapters. Each chapter has its importance and
deals with important aspect of the study.
Chapter one: It deals with the subject matter of the study consisting introduction,
background of the study, study of problem, objective of the study, scope of the
study, study methodology, Literature review, limitation of the study and chapter
plan of the study.
Chapter two It deals with presentation and analysis of relevant data and
information by using various tools.
Chapter three: It states summary, conclusion, and recommendation of the study.

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CHAPTER II: PRESENTATION AND ANALYSIS

2.1 Introduction
Data analysis is the process of developing answers to questions through the examination
and interpretation of data. This chapter is the core of the study which includes detailed
presentation, analysis and their interpretation of primary data which was collected from
the respondent in order to fulfill the objectives of the study. It is the most valuable and
crucial tool to evaluate the true and actual impact of microfinance in our community. By
analyzing the data, one can find out core problems of the limitations of the community.
2.2 Tools for Data Presentation and Analysis
Tools are the important factors for presentation and analysis of the data. Tools make
clearer to analyze and understand. Using tables, bar diagrams, pie charts, etc are the tools
for presentation which expose information at a glance. After presenting collected data,
they will be analyzed by various tools. And report has been analyzed under some
techniques.
2.3 Presentation of Data
In this section, the filtered data are presented and analyze. The main objective of any
project work or research is to present and analyze the data obtained from such work. Only
the reports drawn from such analyze will be helpful to show actual situation and impact
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of the community. In accordance to it, the data collected are shown in different tables,
charts and percentage and are analyzed clearly.

2.3.1 Education Level of Respondent

Table 1: Economic Level of Respondent

Education Level of Respondent

No. of respondent

Illiterates

Literate but not formal study

23

Under SLC

20

Intermediate

12

Education level consists of Illiterates, Literates but not formal study, Under SLC, Intermediate.
There is the majority of respondent who are literate but not formal study i.e 23 respondents and 5
respondents are in minority.

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Figure 1: Pie chart shows the percentage of respondent

2.3.2. Loanees and Non-Loanees

Table: 2 shows numbers of Loanees and Non-Loanees participating in Microfinance
Respondent type

no. of respondent

Loanees

50

Non-Loanees

10

Total Sample Size

60

From the group of 60 respondents, only 50 respondents take loan from micro finance whereas
other 10 respondents where only saver or depositor. The numbers of respondents who borrow and
who do not borrow are also shown in the pie chart.

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Figure 2: Pie chart shown percentage of respondent

2.3.3 Distribution of loan among Loanees

Table 3: Distribution of loan amount among Loanees
No. of
Respondent

percentage

0-15000

14%

15000-30000

18%

30000-45000

12%

45000-60000

15

30%

60000-75000

6%

75000-85000

4%

85000-100000

16%

Total

50

100%

Range of Loan Amount (Rs)

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2.3.4 Distribution of Respondents by Purpose of Borrowing Loan

Table 4: Distribution of Respondents by Purpose of Borrowing Loan
Purpose of taking Loan

No. of Loanees

Percentage (%)

Shop/Business/Trade

14

28%

Agriculture/Vegetable
Farming

13

23%

Poultry Farming

14%

Tailoring

6%

Cow/buffalo Farming

8%

Bee Keeping

2%

Wine

6%

Consumption

10%
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Total Loanees

50

100%

Chimmeki Lagubitta Sanstha (CLS) has been providing loan for undertaking incomegenerating activities like Shop/trade/business, poultry farming, bee keeping, agriculture
farming, and livestock farming. Some amount of the loan is used for purchasing assets,
household consumption, foreign employment, and repayment of loans. Out of 50 loanees
only 5 people had taken loan for consumption purpose. The rest 45 took loans for
productive activities. Amount demanded for the purpose of first loan was
shop/business/trade, which stands higher (28 percent) followed by Agriculture/Vegetable
farming (23 percent). Likewise loan is take for Poultry farming and cow/buffalo farming
is respectively 14% and 8%. Three person were taken loan for tailoring business and only
one respondent is interested bee keeping.

This means the loanees entrepreneurial

capacity and the intention to grow has been positive. Three loanees were seen indulge
himself in wine making activity, which is not a legal activity. No loan has been given in
this category.
2.3.5 Distribution of Average Household income
The table shows the average household income before and after participating in
Chimmeki Lagubitta Sanstha (CLS). To uplift their business and economic condition the
respondent were participating in the CLS. Because of training and empowerment by the
CLS, the responded generate more income after participating in the CLS.
Table 5: Average Household income
Types of business area

Before

After

Shop/Business/Trade

30860

48500

Agriculture/Vegetable Farming

20340

30500

Poultry Farming

30000

40000
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cow/Buffalo Farming

17550

25000

Bee Keeping

15550

19800

Wine

16550

18000

Tailoring

14000

19000

From the table the income of household is increasing after participating in CLS. Before
joining in CMO the respondent generate income from shop/business/Trade is Rs 30,860
and after joining CMO increasing by Rs 48,500.

Compares the sources of income in another statistical format, the paired t-test for
difference of means
Table 6: paired t-test
d2

d=X-Y
Types of business area

Before

After

0000

Shop/Business/Trade

30860

48500

-17640

31116.96

Agriculture/Vegetable
Farming

20340

30500

-10160

10322.56
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Poultry Farming

30000

40000

- 10000

10000

cow/Bufallo Farming

17550

25000

-7450

5550.25

Bee Keeping

15550

19800

-4250

1806.25

Wine

16550

18000

-1450

210.25

Tailoing

14000

19000

-5000

2500

d= -55950

d2=61506.27

Null hypothesis H0: X=Y (There is no significance different between in the average
income of respondents of before and after)
Alternative hypothesis H1: X Y:- that means average income of respondents differ
significantly before and after the implementation of micro finance.

Test statistic = d`
s2 /n
= -7992.85/1987.235114
=4.022095796

Degree of freedom=n-1 =7-1= 6

Level of Significance = 5%
Tabulated value = 2.447

Decision: - since calculated value of t is greater than the tabulated value of t, it is

significant and H0 is rejected and H1 is accepted which means there is change in income
and micro finance was effective.
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2.3.6 Average Household Expenditure of Loanees

There has been a considerable increase in the household expenditure of CMO members
(loanees) after participation in the micro-credit program. The expenditure a propensity of
the households is highlighted by means of Table 7

Table 7: Average Household Expenditure of Loanees

Items

Before (Rs)

Percentage
(%)

After
(Rs)

Percentage changed
(%)
Percentage

Food Expenses

49,560

69.3418%

75,636

67.69%

52.62%

Clothing

5,781

8.0885%

9,339

8.36%

61.55

Health Treatment

3,351

4.6885%

5,169

4.63%

54.25

Child Education

12,000

16.7998%

20,000

17.90%

66.667

Electricity charge

150

0.2099%

300

0.27%

100%

Pure drinking water

130

0.1819%

300

0.27%

130%

Social Expenses

500

0.6996%

1,000

0.8949

100%

71,472

100.0000%

1,11,744

100%

56.35%

Total (n=50)

The average household expenses on food had increased after the people joined CMO
(from Rs. 49,560to Rs. 75,636) reflecting an increase by 52.62%percent. After
participating in CMO, the changed percent of loanees expenses in health treatment of
own and their family members had reached up to 54.25 percent. Similarly, the clothing
expenses changed by 61.55 percent.

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Table 8: Paired t-Test of Average Household Expenditure of Loanees

Items

Before (Rs)
(X)

After (Rs) (Y)

d=X-Y

d2 0000

Food Expesnses

49560

75636

-26076

67995.7760

Clothing

5781

9339

-3558

1265.9364

Health Treatment

3351

5169

-1818

330.5124

Child Education

12000

20000

-8000

6400

Electricity charge

150

300

-150

2.25

Pure driniking water

130

300

-170

2.89

Social Expenses

500

1000

-500

25

d= -40272

d2=76022.3648

Null hypothesis H0: X=Y: - That is average expenses of the respondents before and after do not
differ significantly.
Alternative hypothesis H1: X Y:- that means average expenses of respondents differ
significantly before and after the implementation of micro finance.

Test statistic = d`
s2 /n
= -5753.142857/3547.410453
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=1.621786634

Level of significance= 5% , (two tailed)

Degree of freedom=n-1 =7-1= 6
Tabulated value = 1.943

Decision: - since tabulated value of t is greater than the calculated value of t, it is not significant
and H1 is rejected and H0 is accepted which means there is no change in expenditure pattern.

2.3.7 Current Average Savings Status of Loanees

Table 9 indicates the savings trends of respondents which they deposited in the center meeting
(group meeting) of NESDO. They have to deposit. Rs. 1781.12 per month. The total average
saving of loanees has recorded equal to the amount of next installment. It exhibits that loanees
were more capable to save, which means they were earning quite a good amount through their
business.
Table 9: Distribution of Respondents by Current Saving (yearly)
Description

Amount (in Rs)

Mean Saving

21373.44

Median Saving

47710.10

Standard deviation

31880.02

Minimum saving

11775.00

Maximum saving

73830.32

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The figures in Table 9 show that average saving of loanees is Rs 21373.44. That can be
anticipated as that every household were able to save their income which can be used to
repay their next installment easily. The standard deviation figure, however, shows less
variation of saving between loanees which is Rs 31880.02

2.3.8 Sources of Loan Repayment

Table 10 reveals the sources of loan payment of the user of fund. The loanees business was
running in profit.
Sources of loan repayment

No of respondents

Percent

Money earned from same business

32

64%

Other household income

11

22%

Remittance

10%

Other relative and friends

4%

Majority of the respondents could repay their monthly loan installment from their own business.
(64 percent) have been paying their installments from their same business whereas only 22
percent were using household income for repayment purpose. Table 10 reflects their level of
independency and increased positive attitude towards their business. Some loanees repayment
was made from remittance and friends.

2.3.9 Participation of training

Table 11: no. of respondent who received in training provide
Training

no. of respondent

Yes

46

No

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From the above table, 46 responded received training and 4 responded did not received
training provided by the CLS. From the voice of respondent training like tailoring, candle
making, agriculture, poultry farming, Beauty paler, Bee keeping, fishery, driving are
provided by the CLS. The CLS is empowering the member to uplift their economic
condition.

2.3.10 Business experience Gained by the respondent before entering CLS.

Table 12: Business experience Gained by the respondent before entering CLS
YES

NO

44

From the table 12 respondents have already experience of business and 44 respondents
gained experience after Membership of CLS. The CLS provide money any and idea,
concept about the business.

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CHAPTER V: SUMMARY, FINDINGS AND CONCLUSION

3.1 Introduction
This chapter provides overall description, findings, conclusion from the data analysis and
presentation and recommendation.

3.2 Sumarry
This paper reports on the findings of an descriptive and analytical research whose main
purpose was to investigate the impact of micro finance on the socio economic lives of
sishuwa. This study mainly focuses on women only who are participating in Chemmeki
Lagubitta Sanstha. Among the 120 members in the 3 centers, 90 were loanees and 30
were non-loanees. Sample comprises all 3 centers of the Sishuwa ward of Lekhnath
Municipaity. A 50 percent of the total population has been taken as a sample. The sample
size was 60 which included both 50 loanees and 10 non-loanees. The study sought to
establish whether micro finance empowers the poor and reduces poverty. The study was
conducted through the use of nineteen questionnaires randomly distributed to clients of
different Micro financial institutions. The study revealed that there is a positive
relationship between microcredit and the socio economic lives of people. It was found out
that the activities of microfinance institutions resulted in increased social interaction and
socio economic sustainability.
With the help of purpose of loan borrowing, Sources of income, utilization of Loan,
Income, saving generalized the impact of microfinance. The micro finance has positive
impact to the household in the community.Likewise the Chemeki Microfinance
Organization provides training and help to uplift the economic condition of women and
empower them.

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3.3 Conclusion
Thus to alleviate the poverty in the country, microfinance became an effective
tool. In this context, the study area Lekhnath municipality , sishuwa was selected
where CMO has implemented the first microcredit program to uplift the socioeconomic status of the women of that area. Consequently, the following findings
are arrived at from the study:
The economic status of loanees has improved consequently than when they
started small business with loan in the earlier days. Moreover, it was found that
their socio-economic status was higher than past. From all these we can conclude
that microcredit is an effective tool for raising the socio-economic status of the
poor people, particularly the women.

3.4 RECOMMENATION
As revealed by the study, the loanees were demanding that the loan size should
be increased; effective means should be developed to identify the poor and target
them for loan, training, and regular follow up should be conducted. The interest
rate must be decreased. The outreach of the institution should be enhanced.
Modern technology should be applied to increase the efficiency and to provide
service in remote areas. The study reveals that economic status of women has
risen due to income generating activities and they were socially empowered due
to group solidarity created by microfinance program. They can raise voice against
gender discrimination.
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