Research proposal on

Loan Management of
Himalayan Laghubitta Bittiya Sanstha Ltd.

Submitted by:

Shubham Lama
Exam Roll No.
Reg.No. : 7-2-592-30-2017
Gaurishankar Campus
Submitted to:
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS 4th Year)
Nijgadh,Bara
February,2024
 Contents Page No.
1.1 Background of the study 1
1.2 Profile of the organization 1
1.3 Objectives of the study 2
1.4 Rationale of the study 3
1.5 Review of the study 3
1.6 Methodology of the study 3
1.7 Limitations of the study 4
1.8 Organization of the study 4
1.1 Background of the study
The term "microcredit" gained prominence in the 1970s, and one of the
pioneers in this field was Dr. Muhammad Yunus, an economist from
Bangladesh. In 1976, Yunus founded the Grameen Bank, which became
one of the first formal institutions to provide microcredit to poor women
in rural areas. The Grameen Bank model emphasized group lending and
social collateral, where borrowers formed small groups to support each
other and repay loans.
Microfinance has played a crucial role in empowering women financially
in Nepal. Microfinance provides women, particularly those in rural areas,
with access to formal financial services. Many women may not have had
previous access to traditional banking systems, and microfinance
institutions (MFIs) offer them the opportunity to open savings accounts,
take loans, and access other financial products. Microfinance loans
empower women to start or expand small businesses. Whether it's a
tailoring shop, livestock farming, or a small retail business, women can
use microfinance funds to generate income. This economic activity not
only improves their financial status but also contributes to local
economic development.

1.2 Profile of the organization

With the main object of providing institutional credit for enhancing the
production and productivity of the microfinance sector in the country,the
Himalayan Laghubitta Bittiya Sanstha Limited, a subsidiary company of
Himalayan Bank Limited was incorporated as a public limited company
on 15 March 2011 under the Companies Act of Nepal.Subsequent
amendments to the Act empowered the microfinance to extend credit to
small farmers under group liability and expand the scope of financing to
promote small business easily. The microfinance landscape in Nepal is
diverse, comprising a mix of non-governmental organizations,
cooperatives, and financial institutions offering microfinance services.
Various organizations, including the Nepal Rastra Bank (central bank of
Nepal), have played roles in overseeing and regulating the sector.
It has been established with a motive to provide qualitative and reliable
financial services in a healthy competitive environment. Its goal is to
provide financial tools and resources in the form of micro-credits for
establishing, running, developing, expanding as well as enhancing
capacity and productivity of potential productive sector from the
business point of view. It aims to effectively regulate the available
competency, labor, and capital in the rural sector to establish, run,
develop, expand as well as promote productive and employment-
generating business and actively participating & helping in eliminating
poverty. It focuses on helping the women and unemployed youngsters of
the rural sector for improving economic and social status through micro-
credit, training, and public awareness. Its main focus is in uplifting the
lifestyle of the people of the deprived sector who have very little access
to banking facilities and helping for the overall development of the
economic sector of the country as a whole.

1.3 Objective of The Study

This study is undertaken to focus on the current loan policies being
follow by different microfinances of Nepal.This study also gives direction
to the loan makers for the overall healthier growth of the
microfinances;this study also looks into how such policies could impact
loan market.The main objective of the study is to shade light on these
aspects.
i) To study where the microfinances are following the suitable
loan policy or not.
ii) To study whether the productive lending affects the value of
firm or not.
iii) To compare the loan policy followed by Himalayan Laghubitta
Bittiya Sanstha Ltd. Chosen.
1.4 Rationale of the study
Each examination relies significantly on prior knowledge, as it forms the
basis for the current investigation. In this particular section, an analysis is
conducted concerning the Loan Management of Himalayan Laghubitta
Bittiya Sanstha Limited. This segment serves the purpose of gathering
valuable feedback to expand the information base and input for the
ongoing study, underscoring its significance within this research.

1.5 Review of the study

The earlier chapter has already provided an overview of the microfinance
sectors and a general discussion on liquidity. This chapter primarily
focuses on summarizing existing literature and research relevant to the
ongoing investigation. The goal is to identify the insights shared by
previous researchers and emphasize how the current study contributes
additional value to the research domain. To achieve this, a thorough
review of books, research studies, and articles has been undertaken,
shedding light on the concept of liquidity assessment in microfinance and
revisiting prior studies conducted by different researchers.
The microfinance lending channel, underscoring the crucial role of
microfinance in the financial system and its role in transmitting monetary
policy signals, is supported by both theoretical foundations and
numerous empirical studies. Through the functioning of this channel,
monetary policy has the potential to impact aggregate demand by
influencing the availability of microfinance loans and strengthening the
impact of the interest rate channel.

1.6 Methodology of the study

The methodology for the microfinance study involves a systematic
approach. It begins with a thorough literature review to establish a
foundation. The research design is chosen, specifying methods like
surveys or case studies. A sampling strategy is developed to select
relevant microfinance institutions or regions. Data is collected through
interviews, surveys, or financial report analysis. Variables such as loan
repayment rates and social impact are defined. Analysis, both qualitative
and quantitative, is conducted, addressing ethical considerations.
Triangulation is employed for reliability. Results are presented and
discussed, leading to conclusions and recommendations. The entire
process is documented for transparency and replicability. The study aims
to contribute insights into microfinance's role in financial inclusion and
poverty alleviation.

1.7 Limitation of the study

This report is conducted for the project report of bachelor of business
studies which possesses some limitation which are mentioned below:
i) This study covers the past 5 years data of the Himalayan
Laghubitta Bittiya Sanstha Ltd, which will not make any future
projection for the welfare of the investors.
ii) This study has prepare within limited time frame,which lack the
enough research,experiment & observations.
iii) This study is mainly focused on the secondary sources of data
collection.
iv) This study focus only on the Loan Management of the
institution and ignore other aspect of the institution.
v) Only selected and financial and statistical tool and technique
are used.

1.8 Organization of the study

The report is organized in three chapters .Each until has a clear thematic
cotain and the same entire three chapter together present the overall
report on the topic.
This study will be divided into three chapters as follows:
Chapter One: Introduction
Addresses the topic of investigation, the research framework is outlined
in this chapter. The entirety of the research will be anchored in the
introduction chapter. This section encompasses the broad context of the
study, articulation of the research problems, establishment of study
objectives, recognition of the study's significance, acknowledgment of
study limitations, and delineation of the study's organizational structure.

Chapter Two: Result & Analysis

Constituting the core of the investigation, this section accomplishes the
study's objectives through the presentation and analysis of data,
employing diverse tools as outlined in the methodology. Within this
chapter, a detailed examination of the collected data is undertaken,
employing statistical and financial tools for a descriptive analysis. The key
discoveries of the study are then derived from a thorough assessment of
both primary and secondary data within this chapter.

Chapter Three: Summary & Conclusion

Encompassing the discussions and conclusions drawn from the study, this
chapter focuses on summarizing the research and offering
recommendations that highlight the implications of the findings, along
with suggestions for enhancements in the relevant field.