Microfinance

ASSESSING THE IMPACT OF MICROFINANCE INSTITUTIONS ON
QUALITY OF LIFE IN BIRATNAGAR-12 AND BIRATNAGAR-13
A Summer Project Work Report
By
Prajwal Thapa
Exam Roll No.: 24133/19
TU Registration No.: 7-2-0003-2046-2019
Mahendra Morang Adarsha Multiple Campus
Submitted to
Faculty of Management
Tribhuvan University
Kathmandu
In partial fulfillment of the requirement for the degree of
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
Biratnagar
April, 2024
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DECLARATION
I hereby declare that the project work entitled 'ASSESSING THE IMPACT OF
MICROFINANCE INSTITUTIONS ON QUALITY OF LIFE IN BIRATNAGAR-12
AND BIRATNAGAR-13' submitted to the Faculty of Management, Tribhuvan
University, Kathmandu is an original piece of work under the supervision of Dr.
Bhabishya Kumar Mishra faculty member, Mahendra Morang Adarsha Multiple Campus,
Biratnagar, and is submitted in partial fulfillment of the requirements for the degree of
Bachelor of Business Administration (BBA). This project work report has not been
submitted to any other university or institution for the award of any degree or diploma.
………………………..
Signature
Prajwal Thapa
Date: April, 2024
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SUPERVISOR’S RECOMMENDATION
The project work report entitled 'ASSESSING THE IMPACT OF MICROFINANCE

INSTITUTIONS ON QUALITY OF LIFE IN BIRATNAGAR-12 AND
BIRATNAGAR-13' submitted by Prajwal Thapa of Mahendra Morang Adarsha Multiple
Campus, Biratnagar is prepared under my supervision as per the procedure and format
requirements laid by the Faculty of Management, Tribhuvan University, as partial
fulfillment of the requirements for the degree of Bachelor of Business Administration
(BBA). I, therefore, recommend the project work report for evaluation.
………………………………………..
Dr. Bhabishya Kumar Mishra
Research Supervisor
Date: April, 2024
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ENDORSEMENT
We hereby endorse the project work report entitled 'ASSESSING THE IMPACT OF
MICROFINANCE INSTITUTIONS ON QUALITY OF LIFE IN BIRATNAGAR-12
AND BIRATNAGAR-13' submitted by Prajwal Thapa of Mahendra Morang Adarsha
Multiple Campus, Biratnagar, in partial fulfillment of the requirements for the degree of
the Bachelor of Business Administration (BBA) for external evaluation.
……………………………… ………………………………
Signature Signature
Dr. Bhabishya Kumar Mishra Dr. Mohan Kumar Subedi
Chairman, Research Committee Director, FOM
Date: April, 2024 Date: April, 2024
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ACKNOWLEDGEMENT
My outmost gratitude goes to the Tribhuvan University for including this summer project
in the syllabus of BBA, which I think is very valuable in developing practical knowledge
of the students.
This project report would not have been possible without the support and helping hands
of many individuals. I would like to extend my sincere gratitude to all of them.
I would like to express my deepest sense of gratitude and sincere thanks to our highly
respected and esteemed supervisor Dr. Bhabishya Kumar Mishra, for his valuable
guidance, encouragement and assistance for completing this summer project report. His
useful suggestions for this whole work and co-operative behavior are sincerely
acknowledged.
I would like to express my sincere thanks to whole Faculty of Management, MMAMC

Tribhuvan University for giving me this opportunity to undertake this project.
Last but not the least, I would like to thank all my friends and respondents for providing
their precious time and helping for completing this project report.
Prajwal Thapa
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EXECUTIVE SUMMARY
This research report presents a study assessing the impact of microfinance institutions on
quality of life in the densely populated urban areas of Biratnagar-12 and Biratnagar-13 in
eastern Nepal. It provides context on the growth of microfinance in these areas, the
research objectives to evaluate effects on income generation, asset accumulation, and
access to financial services, a literature review, and the methodology of conducting a
descriptive study involving a structured survey of 50 households.
The data analysis and key findings show respondents with diverse demographic profiles
and widespread participation in microfinance services like credit, savings, and insurance.
There were significant increases in average monthly household incomes after joining
microfinance institutions (MFIs), with most households seeing growth. Agriculture and
small businesses emerged as major income sources. Asset ownership increased
substantially, particularly in household items financed through MFI loans and savings,
with respondents reporting an increased sense of financial security. All respondents
gained access to formal financial services like savings accounts and loans post-MFI
membership, with high satisfaction levels.
The findings align with literature showing microfinance's positive impacts on quality of
life indicators like income, assets, and financial access, while noting limitations like
sampling bias. Action implications include expanding outreach, tailoring products,
strengthening financial literacy, facilitating asset accumulation, enhancing monitoring and
evaluation, stakeholder collaboration, and further research. Overall, the study contributes
evidence on microfinance's role in promoting financial inclusion, economic
empowerment, and improved livelihoods in urban Nepal, informing efforts to enhance
such interventions sustainably.
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TABLE OF CONTENTS
DECLARATION..................................................................................................................................i
SUPERVISOR’S RECOMMENDATION...............................................................................................iii
ENDORSEMENT..............................................................................................................................iv
.......................................................................................................................................................iv
ACKNOWLEDGEMENT.....................................................................................................................v
EXECUTIVE SUMMARY....................................................................................................................vi
List of Tables....................................................................................................................................x
List of Figures..................................................................................................................................xi
Chapter i Introduction....................................................................................................................1
1.1 Context Information........................................................................................................1
1.2 Objective of the study.....................................................................................................2
1.3 Significance of the study..................................................................................................2
1.4 Literature Review............................................................................................................3
1.4.1 Theoretical Review.........................................................................................................3
1.4.2 Empirical Review............................................................................................................4
1.4.3 Gaps in existing literature...............................................................................................6
1.5 Conceptual Framework...............................................................................................6
1.6 Research Methodology...............................................................................................7
1.6.1 Description of the Study Area:.................................................................................7
1.6.2 Research Design......................................................................................................7
1.6.3 Population and sample............................................................................................8
1.6.4 Data Collection and Procedure................................................................................8
1.6.5 Tools and Techniques of Data Analysis....................................................................8
1.7 Limitations of the Study..................................................................................................9
chapter II data presentation and analysis....................................................................................10
2.1 Respondent Profile........................................................................................................10
2.1.1 Age of respondents...............................................................................................11
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2.1.2 Gender of respondents..........................................................................................12
2.1.3 Location of respondents........................................................................................13
2.1.4 Household Size of respondents.............................................................................14
2.1.5 Marital Status........................................................................................................15
2.1.6 Educational Level...................................................................................................16
2.2 Microfinance Participation............................................................................................17
2.2.1 Membership in MFI...............................................................................................17
2.2.2 Duration of MFI membership................................................................................18
2.2.3 Services received from MFI...................................................................................19
2.2.4 Frequency of interaction with MFI staff................................................................20
2.2.5 Primary reason for joining MFI..............................................................................21
2.3 Income and Expenditure...............................................................................................22
2.3.1 Household income before and after joining MFI...................................................22
2.3.2 Increase in household income...............................................................................23
2.3.3 Sources of household income................................................................................25
2.3.4 Uses of loans or savings from MFI.........................................................................26
2.4 Assets Ownership..........................................................................................................27
2.4.1 Assets owned before and after joining MFI...........................................................27
2.4.2 Financing of new asset acquisition........................................................................28
2.4.3 Perception of financial security.............................................................................29
2.5 Access to Financial Services...........................................................................................30
2.5.1 Access to formal financial services........................................................................30
2.5.2 Financial services accessed since joining MFI........................................................31
2.5.3 Satisfaction with MFI financial services.................................................................32
2.6 Findings & Discussions...................................................................................................33
2.6.1 Findings.................................................................................................................33
2.6.2 Discussions............................................................................................................34
chapter III conclusion & action implications.................................................................................36
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3.1 Conclusion...........................................................................................................................36
3.2 Action Implications..............................................................................................................37
References....................................................................................................................................40
Appendix I.....................................................................................................................................42
APPENDIX II...................................................................................................................................48
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LIST OF TABLES
Table 1 Age Distribution: Frequency and Percentage of Respondents............................21

Table 2 Gender Distribution: Frequency and Percentage of Respondents.......................22
Table 3 Location Distribution: Frequency and Percentage of Respondents....................23
Table 4 Household size Distribution: Frequency and Percentage of Respondents...........24
Table 5 Marital Status Distribution: Frequency and Percentage of Respondents............25
Table 6 Educational Level Distribution: Frequency and Percentage of Respondents.....26
Table 7 Membership Status in MFI: Frequency and Percentage.....................................27
Table 8 Duration of MFI membership: Frequency and Percentage.................................28
Table 9 Services received from MFI: Frequency and Percentage....................................29
Table 10 Frequency of interaction with MFI staff: Frequency and Percentage...............30
Table 11 Primary reason for joining MFI: Frequency and Percentage............................31
Table 12 Average Household income before and after joining MFI: Frequency and
Percentage..........................................................................................................................32
Table 13 Change in household income: Frequency and Percentage................................33
Table 14 Percentage increase in household income: Frequency and Percentage..............34
Table 15 Main Sources of household income: Frequency and Percentage......................35
Table 16 Utilization of loans or savings from MFI: Frequency and Percentage..............36
Table 17 Assets owned before and after joining MFI: Frequency and Percentage...........37
Table 18 Financing of new assets: Frequency and Percentage........................................38
Table 19 Perceived financial security since joining the MFI: Frequency and Percentage
............................................................................................................................................39
Table 20 Access to financial services before and after joining the MFI: Frequency and
Percentage..........................................................................................................................40
Table 21 Financial services accessed since joining MFI: Frequency and Percentage.....41
Table 22 Satisfaction with MFI financial services provided by MFI: Frequency and
Percentage..........................................................................................................................42
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LIST OF FIGURES
Figure 1 Conceptual Framework.......................................................................................19

Figure 2 Pie Chart showing age distribution of respondents............................................23
Figure 3 Pie Chart showing gender distribution of respondents.......................................24
Figure 4 Pie Chart showing location distribution of respondents.....................................25
Figure 5 Pie Chart showing household size distribution of respondents..........................26
Figure 6 Pie Chart showing marital status distribution of respondents.............................27
Figure 7 Bar Graph showing educational level distribution of respondents.....................28
Figure 8 Pie Chart showing membership status in MFI....................................................29
Figure 9 Bar Graph showing duration of MFI membership..............................................30
Figure 10 Bar Graph showing services received from MFI..............................................31
Figure 11 Bar Graph showing frequency of interaction with MFI staff...........................32
Figure 12 Pie Chart showing primary reason for joining MFI..........................................33
Figure 13 Bar Graph showing household income before and after joining MFI..............34
Figure 14 Pie Chart showing change in household income..............................................35
Figure 15 Pie Chart showing percentage increase in household income..........................36
Figure 16 Bar Graph showing sources of household income............................................37
Figure 17 Pie Chart showing uses of loans or savings from MFI.....................................38
Figure 18 Bar Graph showing assets before and after joining MFI..................................39
Figure 19 Pie Chart showing financing of new assets acquisition....................................40
Figure 20 Bar Graph showing perceived financial security..............................................41
Figure 21 Bar Graph showing access to financial services before and after joining MFI 42
Figure 22 Bar Graph showing financial services accessed since joining MFI..................43
Figure 23 Bar Graph showing satisfaction with MFI financial services..........................44
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1
CHAPTER I
INTRODUCTION
1.1 Context Information
Biratnagar, the industrial capital of eastern Nepal, has witnessed a significant growth in
the microfinance sector in recent years. This growth has been particularly notable in the
densely populated areas of Biratnagar 12 and Biratnagar 13, where a substantial portion
of the population faces challenges in accessing formal banking services due to various
socio-economic factors.
The rise of microfinance institutions in these areas has been driven by the recognition of
the crucial role they play in promoting financial inclusion and empowering individuals
and communities. These institutions have tailored their services to cater to the specific
needs of low-income households, small-scale entrepreneurs, and marginalized segments
of society.
Microcredit, one of the core services offered by microfinance institutions, has been
instrumental in providing access to small loans for individuals and groups. These loans
have facilitated the establishment and expansion of income-generating activities, such as
small businesses, handicrafts, agriculture, and other entrepreneurial ventures. By
providing the necessary capital, microcredit has enabled beneficiaries to break the cycle
of poverty and improve their livelihoods.
Alongside microcredit, micro savings programs have gained significant traction in

Biratnagar 12 and Biratnagar 13. These programs encourage individuals to develop a
culture of saving, even with modest amounts. The savings accumulated through these
programs serve as a safety net during times of financial emergencies, enabling households
to cope with unexpected expenses or investing in assets that can generate long-term
returns, such as education or home improvements.
Microinsurance services have also played a crucial role in enhancing the overall financial
security and resilience of beneficiaries. By providing affordable insurance coverage for
health, crops, and assets, microfinance institutions have helped mitigate the financial risks
associated with unforeseen events, such as illnesses, natural disasters, or the loss of
valuable assets.
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The impact of microfinance institutions in Biratnagar 12 and Biratnagar 13 has been

multifaceted, extending beyond mere economic empowerment. These institutions have
contributed to the overall development of the local communities by fostering
entrepreneurship, promoting financial literacy, and creating opportunities for social and
economic mobility.
However, despite the positive impacts, the microfinance sector in these areas has also
faced challenges and criticisms. Some concerns include the potential over-indebtedness of
borrowers, the sustainability of microfinance institutions themselves, and the
effectiveness of their outreach strategies in reaching the most marginalized segments of
society.
To address these challenges and maximize the potential of microfinance interventions, it

is crucial to conduct comprehensive assessments and gather empirical data on their actual
impact on the quality of life of beneficiaries. This research aims to contribute to this effort
by providing a localized and in-depth analysis of the microfinance sector's impact in
Biratnagar 12 and Biratnagar 13.
1.2 Objective of the study
Microfinance institutions have been instrumental in providing financial services to

underserved communities, with the potential to improve their quality of life. To this end,
the objective of this research is:
 To assess the impact of microfinance institutions on quality of life in Biratnagar

12 and Biratnagar 13 through evaluating income generation, asset accumulation,
and access to financial services.
1.3 Significance of the study
Microfinance institutions play a crucial role in addressing poverty and financial

exclusion, particularly in areas with limited access to formal banking services. However,
there is a need to assess the real impact of their interventions on the quality of life of
beneficiaries. In this context, the significance of this study lies in:
i. Informing policies and strategies to enhance the effectiveness of microfinance

interventions in improving livelihoods and promoting financial inclusion.
ii. Providing insights for microfinance institutions to refine their products and
services to better cater to the needs of target beneficiaries.
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iii. Contributing to the existing knowledge on the role of microfinance in poverty

alleviation and sustainable development, particularly in urban and semi-urban
contexts.
iv. Raising awareness among local communities about the potential benefits and
responsible utilization of available microfinance services.
1.4 Literature Review
The relationship between microfinance interventions and their impact on quality of life
has been extensively studied, drawing from various theoretical frameworks and empirical
research. The literature review aims to provide a comprehensive overview of the existing
knowledge on this topic, critically analyzing theoretical perspectives and synthesizing
findings from previous studies. It will identify gaps and limitations in the current
literature, thereby justifying the significance and contributions of the present research. By
establishing a solid foundation, the literature review will guide the interpretation and
contextualization of the study's findings within the broader academic discourse on
microfinance and quality of life.
1.4.1 Theoretical Review
The concept of microfinance and its potential impact on improving the quality of life are
grounded in several theoretical frameworks and economic principles. These theoretical
foundations provide a basis for understanding the mechanisms through which
microfinance interventions can contribute to poverty alleviation, economic empowerment,
and overall well-being. Some of the key theoretical underpinnings are as follows:
Financial Inclusion Theory: This theory emphasizes the importance of providing access
to financial services for individuals and communities who are traditionally excluded from
formal banking systems. Microfinance institutions play a crucial role in bridging this gap
by offering products and services tailored to the needs of low-income populations,
enabling them to participate in income-generating activities, build assets, and manage
financial risks. (Beck, et al., 2007)
Household Economic Portfolio Model: This model suggests that low-income

households engage in diverse economic activities to manage risks and smooth
consumption. Microfinance services, such as microcredit and micro savings, provide
households with the necessary resources and financial tools to diversify their economic
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portfolios, leading to increased income stability and resilience against economic shocks.
(Delarnarca, 1994)
Sustainable Livelihoods Approach: This approach recognizes that poverty is

multidimensional and encompasses various aspects of life, including economic, social,
and environmental factors. Microfinance interventions can contribute to sustainable
livelihoods by enhancing financial capital, which in turn can be leveraged to build other
forms of capital, such as human capital (through education and skill development) and
physical capital (through asset accumulation). (Department for International Development
(DFID), 1999)
Empowerment Theory: Microfinance initiatives are often viewed as a means of

empowering individuals, particularly women, by providing them with economic
opportunities and decision-making power within their households and communities. This
empowerment can lead to improved self-confidence, social status, and overall well-being.
(Kabeer, 1999)
Human Capital Development Theory: Access to financial services through

microfinance can facilitate investments in human capital development, such as education,
health, and skill-building. These investments can have long-term impacts on income
generation, productivity, and overall quality of life for individuals and their families.
(Becker, 1964)
Social Capital Theory: Microfinance programs, particularly those that involve group
lending and community-based approaches, can foster the development of social capital by
promoting trust, cooperation, and network building among participants. Strong social
capital can contribute to resilience, information sharing, and collective action, further
enhancing the impact of microfinance interventions. (Coleman, 1988)
These theoretical foundations provide a framework for understanding the potential

mechanisms through which microfinance interventions can contribute to improving
various aspects of quality of life, such as income generation, asset accumulation, financial
security, and overall well-being. However, it is important to note that the actual impact of
microfinance may be influenced by various contextual factors, including socio-economic
conditions, institutional arrangements, and individual characteristics of the beneficiaries.
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1.4.2 Empirical Review
Numerous studies have been conducted to examine the relationship between microfinance
interventions and various indicators of quality of life, such as income generation, asset
accumulation, and access to financial services. While the findings have been mixed, many
researchers have documented positive impacts of microfinance programs on these
aspects. However, it is essential to consider the specific contexts and program designs, as
the effects can vary across different regions and populations.
Income Generation:
A study by Khandker (2005) in Bangladesh found that microfinance program

participation increased household income by about 30% for participants from
microfinance institutions like Grameen Bank and BRAC.
Research by Imai, et al. (2010) in India showed that access to microcredit led to an 18%
increase in income for participants compared to non-participants.
A meta-analysis by Duvendack, et al. (2011) across various countries found that

microfinance had a positive but modest impact on income, with effects varying across
regions and types of interventions.
Asset Accumulation:
A study by Barnes, et al. (2001) in Uganda found that access to microfinance services
helped participants accumulate household assets, including livestock, land, and durable
goods.
Research by Zaman (1999) in Bangladesh revealed that participants in microcredit

programs were more likely to own productive assets, such as cattle and agricultural
machinery, compared to non-participants.
A study by Gardebroek & Berhane (2011) in Ethiopia showed that access to microfinance
contributed to the accumulation of non-land assets, particularly for female-headed
households.
Access to Financial Services:

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A World Bank report Demirguc-Kunt, et al. (2014) found that microfinance institutions
played a significant role in improving access to financial services in developing countries,
particularly for women and those in rural areas.
Research by Brau & Woller (2004) across various countries demonstrated that
microfinance institutions effectively reached underserved populations, providing them
with access to credit, savings, and insurance services.
A study by Cull, et al. (2014) in India revealed that expanding access to microfinance led
to increased household borrowing and investment in durable goods and productive assets.
While these findings generally suggest positive impacts of microfinance interventions on

quality of life indicators, it is crucial to consider the specific contexts, program designs,
and individual characteristics of participants, as some studies have also highlighted
potential negative consequences, such as over-indebtedness and risk exposure.
1.4.3 Gaps in existing literature
i. Limited understanding of the multidimensional impact of microfinance:

 Existing studies often focus on the impact of microfinance on a narrow set of
outcomes, such as income or consumption.
 The survey questionnaire captures a broader range of impacts, including changes
in income, expenditure, asset ownership, and access to financial services,
providing a more holistic understanding.
ii. Lack of contextual analysis and heterogeneity:
 Much of the existing literature treats microfinance participants as a homogeneous
group, overlooking the importance of individual and household-level
characteristics.
 The detailed information collected in the survey on respondent demographics and
microfinance engagement allows for an analysis of how the impacts vary based on
contextual factors.
iii. Predominance of cross-sectional studies:
 A significant portion of the existing literature on microfinance impact relies on
cross-sectional data, limiting the ability to capture the dynamic and long-term
effects.
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 The survey questionnaire collects longitudinal data on income and assets before
and after joining the microfinance institution, enabling an assessment of the
sustained impacts over time.
By addressing these gaps, the study can contribute to a more nuanced and comprehensive
understanding of the multidimensional, contextual, and long-term impacts of
microfinance on the quality of life of the target beneficiaries in the Biratnagar 12 &
Biratnagar 13 area of Nepal.
1.5 Conceptual Framework
The conceptual framework illustrates the potential pathways through which the various
services provided by MFIs, including microcredit, micro savings, and microinsurance,
can lead to enhanced income generation, asset accumulation, and access to financial
services, ultimately contributing to an improved quality of life for individuals and
households.
Figure 1
Conceptual Framework
Microfinance Institutions
Interventions
Microcredit Micro savings Microinsurance

 Individual Loans  Savings accounts  Health Insurance
 Group Loans  Savings Groups  Crop/Asset
Insurance
Quality of Life
 Income Generation
 Asset Accumulation
 Access to Financial Services
1.6 Research Methodology
1.6.1 Description of the Study Area:
Biratnagar 12 and Biratnagar 13 are densely populated areas within the metropolitan city
of Biratnagar, located in the Morang District of eastern Nepal. These areas are
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characterized by a diverse socio-economic profile, with a significant portion of the

population engaged in various income-generating activities, including small businesses,
handicrafts, and agriculture. The presence of microfinance institutions in these areas has
been growing, providing financial services to individuals and households traditionally
excluded from formal banking systems.
1.6.2 Research Design
This study employs a descriptive research design to explore the relationship between
microfinance institutions and the quality of life of individuals. By utilizing a structured
questionnaire, demographic information, microfinance usage patterns, and measures of
quality of life will be collected from participants. The descriptive design allows for the
comprehensive description and analysis of data through the use of descriptive statistics
such as frequency tables, percentages, mean, median, and standard deviation. Through
this approach, the study aims to provide a detailed overview of the characteristics and
behaviors of individuals in relation to microfinance usage and its impact on quality of life
within the target population.
1.6.3 Population and sample
This study focuses on the population residing in wards 12 and 13 of Biratnagar, aiming to
investigate the relationship between microfinance institutions and the quality of life of
individuals within this specific geographical area. With Biratnagar being a significant
urban center in Nepal, understanding the dynamics of microfinance and its impact on
quality of life within these wards holds particular relevance. To ensure representation
from the target population, a convenience sampling technique will be employed with the
sample size of 50 households. Through this approach, the study aims to gather a diverse
range of perspectives and experiences, enabling a comprehensive exploration of the
research topic within the context of Biratnagar wards 12 and 13.
1.6.4 Data Collection and Procedure
The data collection process involves the administration of a structured questionnaire

designed specifically for this study. Field visits will be conducted to collect data from
individuals residing in wards 12 and 13 of Biratnagar. The structured questionnaire
comprises sections covering demographic information, microfinance usage patterns, and
measures of quality of life. Participants will be approached at their residences or other
convenient locations within the wards. The use of a structured questionnaire allows for
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systematic data gathering, ensuring that relevant information pertinent to the research
objectives is captured effectively.
1.6.5 Tools and Techniques of Data Analysis
In this study, frequency tables are employed to organize and display the occurrence of
different categories within the collected data. These tables provide a clear overview of
how often each category appears, allowing researchers to identify patterns and trends.
Additionally, percentages are calculated to show the relative frequency of each category,
providing a more nuanced understanding of the distribution.
To further enhance the presentation of data, visual aids such as bar graphs, pie charts, and
clustered graphs are utilized. Bar graphs are effective for comparing the frequency or
percentage of different categories by representing them as bars of varying lengths. Pie
charts offer a visual representation of the proportion of each category relative to the
whole, making it easy to grasp the distribution at a glance. Clustered graphs can be useful
for comparing multiple datasets simultaneously, allowing researchers to identify
correlations or discrepancies between different variables.
By incorporating these visual elements into the analysis, the study aims to not only
present the findings in a comprehensive manner but also to make them more accessible
and understandable to the audience.
1.7 Limitations of the Study
a) Sampling Bias: The sample may not fully represent the target population,
affecting generalizability.
b) Self-Report Bias: Participants may provide socially desirable responses or
inaccurately recall information.
c) Lack of Pre-Existing Data: Without baseline data, it's hard to attribute changes
solely to microfinance participation.
d) Short-Term Effects: Descriptive studies may miss long-term changes in quality of
life.
e) Measurement Limitations: Indicators may not fully capture experiences or may
suffer from errors. Contextual Factors: Factors like culture and policies can
influence outcomes but may not be fully considered.
f) Ethical Considerations: Protecting participants' rights and well-being is crucial
throughout the study.
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g) Resource Constraints: Limited time, funds, or data can limit the study's depth and
generalizability.
CHAPTER II
DATA PRESENTATION AND ANALYSIS
The data presentation and analysis are currently focusing on evaluating three key aspects:
income generation, asset accumulation, and access to financial services. A comprehensive
frequency table is being constructed to showcase the distribution of data related to these
variables within the target areas. Percentage analysis is then being conducted to determine
the proportional significance of each variable in contributing to the overall quality of life.
Visual representations such as pie charts and bar diagrams are being employed to
illustrate these findings, offering clear insights into the impact of microfinance
institutions on the economic well-being and financial inclusion of the communities under
study. Through this analysis, the research aims to provide valuable insights for
policymakers, practitioners, and stakeholders involved in microfinance initiatives in
Biratnagar 12 and Biratnagar 13.
2.1 Respondent Profile
The respondent profile encompasses a diverse range of individuals, reflecting various

demographic characteristics. Across the sampled population of 50 respondents, ages vary
widely, spanning from young adults to older individuals. Gender distribution among
respondents is representative of the community, encompassing both males and females.
These respondents are situated across Birtatnagar-12 & Biratnagar-13, providing a
comprehensive representation of the target population. Household sizes differ among
respondents, reflecting the varying compositions of families and living arrangements.
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Marital status among respondents includes individuals who are single, married, divorced,
or widowed, reflecting the diverse social dynamics within the community. Furthermore,
the educational level of respondents varies, with individuals having attained differing
levels of formal education, from primary schooling to higher education qualifications.
This diverse respondent profile ensures a comprehensive understanding of the
community's demographics and allows for nuanced insights into the impact of
microfinance institutions on individuals from various backgrounds and circumstances.
2.1.1 Age of respondents

Table 1
Age Distribution: Frequency and Percentage of Respondents
S. N Age Frequency Percentage

1 25-35 9 18
2 35-45 19 38
3 45-55 17 34
4 Above 55 5 10
Note: Age Distribution of Respondents sourced from Household Survey, 2024
Table 1 illustrates the age distribution of the 50 survey respondents. The largest
proportion, 38% or 19 individuals, are in the 35-45 years age group. The 45-55 years age
group accounts for the second-highest percentage at 34%, or 17 respondents. The 25-35
years age group makes up 18% of the total, with 9 respondents. The smallest segment is
the "Above 55" years age group, which represents 10% of the sample, or 5 individuals.
Figure 2
Pie Chart showing age distribution of respondents
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Age
Above 55
10%
25-35
18%
25-35
35-45
45-55
Above 55
45-55
34%
35-45
38%
Note: Age Distribution of Respondents sourced from Table 1
2.1.2 Gender of respondents

Table 2
Gender Distribution: Frequency and Percentage of Respondents
S. N Gender Frequency Percentage

1 Male 21 42
2 Female 29 58
3 Prefer not to say 0 0
Note: Gender Distribution of Respondents sourced from Household Survey, 2024
Table 2 illustrates the gender distribution of the 50 survey respondents. Out of the total 50
participants, 21 individuals or 42% identified as male. The majority, comprising 29
respondents or 58%, identified as female. There were no respondents who preferred not to
say their gender.
Figure 3
Pie Chart showing gender distribution of respondents
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Gender
Male
42%
Male
Female
Prefer not to say
Female
58%
Note: Gender Distribution of Respondents sourced from Table 2
2.1.3 Location of respondents

Table 3
Location Distribution: Frequency and Percentage of Respondents
S. N Location Frequency Percentage

1 Biratnagar-12 22 44
2 Biratnagar-13 28 56
Note: Location Distribution of Respondents sourced from Household Survey, 2024
Table 3 shows the location distribution of the 50 survey respondents. The majority, 28
individuals or 56%, are from Biratnagar-13. The remaining 22 respondents, accounting
for 44%, are from Biratnagar-12.
Figure 4
Pie Chart showing location distribution of respondents
14
2
Location
2% 3
10%
6 and more
24%
2
3
4 4
24% 5
6 and more
5
40%
Note: Location Distribution of Respondents sourced from Table 3
2.1.4 Household Size of respondents

Table 4
Household size Distribution: Frequency and Percentage of Respondents
S. N Household Size Frequency Percentage

1 2 1 2
2 3 5 10
3 4 12 24
4 5 20 40
5 6 and more 12 24
Note: Household Size Distribution of Respondents sourced from Household Survey, 2024
Table 4 presents the household size distribution of the 50 survey respondents. The largest
proportion, 40% or 20 respondents, have a household size of 5 members. Households
with 4 and 6 or more members each account for 24% of the sample, with 12 respondents
15
in each category. 10% of the respondents have a household size of 3, while only 2% or 1
respondent has a household size of 2.
Figure 5
Pie Chart showing household size distribution of respondents
2
2% Household Size
3
6 and more 10%
24%
2 3
4 5
4
24% 6 and more
5
40%
Note: Household Size Distribution of Respondents sourced from Table 4
2.1.5 Marital Status

Table 5
Marital Status Distribution: Frequency and Percentage of Respondents
S. N Marital Status Frequency Percentage

1 Single 5 10
2 Married 35 70
3 Divorced/Separated 5 10
4 Widowed 5 10
Note: Marital Status Distribution of Respondents sourced from Household Survey, 2024
Table 5 illustrates the marital status distribution of the 50 survey respondents. The
majority, 70% or 35 respondents, are married. The remaining respondents are equally
16
distributed among single, divorced/separated, and widowed categories, each representing

10% of the sample, or 5 individuals in each group.
Figure 6
Pie Chart showing marital status distribution of respondents
Marital Status
Widowed
10% Single
10%
Divorced/Separated
10%
Single
Married
Divorced/Separated
Widowed
Married
70%
Note: Marital Status Distribution of Respondents sourced from Table 5
2.1.6 Educational Level

Table 6
Educational Level Distribution: Frequency and Percentage of Respondents
S. N Educational Level Frequency Percentage

1 No formal education 10 20
2 Primary education 10 20
3 Secondary education 22 44
4 Higher education 8 16
Note: Educational Level Distribution of Respondents sourced from Household Survey,
2024
17
Table 6 shows the educational level distribution of the 50 survey respondents. The largest
proportion, 44% or 22 respondents, have completed secondary education. Respondents
with no formal education and primary education each account for 20% of the sample,
with 10 individuals in each category. The smallest group, 16% or 8 respondents, have
attained higher education.
Figure 7
Bar Graph showing educational level distribution of respondents
Educational Level
25
22
20
Number of Respondents
15
10 10
10
8
0
No formal education Primary education Secondary education Higher education
Note: Educational Level Distribution of Respondents sourced from Table 6
2.2 Microfinance Participation
Microfinance participation varies among respondents, with durations of membership

ranging from months to years. Services received include credit facilities, savings
accounts, and more. Interaction frequency with MFI staff varies. Primary reasons for
joining MFIs include access to credit, savings opportunities, and financial education.
Overall, microfinance participation reflects diverse needs and aspirations, showcasing the
multifaceted role of MFIs in fostering financial inclusion and empowerment within the
community.
2.2.1 Membership in MFI

Table 7
Membership Status in MFI: Frequency and Percentage
18
S. N Are you a member of any MFIs? Frequency Percentage

1 Yes 50 100
2 No 0 0
Note: Membership Status in MFI of Respondents sourced from Household Survey, 2024
Table 7 illustrates the membership in microfinance institutions (MFIs) among the 50

survey respondents. All 50 respondents, representing 100% of the sample, are members
of at least one MFI. There are no respondents who are not members of any MFI.
Figure 8
Pie Chart showing membership status in MFI
Membership in MFI
Yes
No
Yes
100%
Note: Membership Status in MFI of Respondents sourced from Table 7
2.2.2 Duration of MFI membership

Table 8
Duration of MFI membership: Frequency and Percentage
How long have you been a member of the

S. N MFI? Frequency Percentage
1 Less than 1 year 3 6
2 1-3 years 15 30
3 3-5 years 24 48
4 More than 5 years 8 16
Note: Duration of MFI membership of Respondents sourced from Household Survey,
2024
19
Table 8 presents the duration of MFI membership among the 50 survey respondents. The
largest proportion, 48% or 24 respondents, have been members of an MFI for 3-5 years.
30% or 15 respondents have been members for 1-3 years, while 16% or 8 respondents
have been members for more than 5 years. The smallest group, 6% or 3 respondents, have
been members for less than 1 year.
Figure 9
Bar Graph showing duration of MFI membership
Duration of MFI membership

30
25 24
20
15
15
10 8
5 3
0
Less than 1 year 1-3 years 3-5 years More than 5 years
Note: Duration of MFI membership of Respondents sourced from Table 8
2.2.3 Services received from MFI

Table 9
Services received from MFI: Frequency and Percentage
What services have you received from the

1 Individual Loan 31 62
2 Group Loan 12 24
3 Savings Account 37 74
4 Insurance 16 32
5 Business development services 4 8
20
Note: Services received from MFI by Respondents sourced from Household Survey, 2024
Table 9 shows the services received by the 50 survey respondents from the microfinance
institutions (MFIs) they are members of. The most common service is a savings account,
utilized by 74% or 37 respondents. Individual loans are the second most popular service,
accessed by 62% or 31 respondents. Group loans are used by 24% or 12 respondents, and
insurance services are utilized by 32% or 16 respondents. The least common service is
business development services, which 8% or 4 respondents have received.
Figure 10
Bar Graph showing services received from MFI
Services received from MFI

40 37
35 31
30
25
20 16
15 12
10
4
5
s
0
ce
nt
n
vi
e
oa
oa
ou
nc
er
L
cc
ra
ts
al
su
A
up
en
du
In
gs
ro
m
vi
op
di
vi
l
In
Sa
ve
de
s
es
in
us
B
Note: Services received from MFI by Respondents sourced from Table 9
2.2.4 Frequency of interaction with MFI staff

Table 10
Frequency of interaction with MFI staff: Frequency and Percentage
S. N How often do you interact with the MFI staff? Frequency Percentage
1 Weekly 22 44
2 Monthly 24 48
3 Quarterly 4 8
4 Annually 0 0
Note: Frequency of interaction with MFI staff sourced from Household Survey, 2024
21
Table 10 illustrates the frequency of interaction between the 50 survey respondents and
the staff of their respective microfinance institutions (MFIs). The majority of respondents,
48% or 24 individuals, interact with the MFI staff on a monthly basis. The second largest
group, 44% or 22 respondents, interact with the staff on a weekly basis. Only 8% or 4
respondents interact with the MFI staff on a quarterly basis, and there are no respondents
who interact with the staff annually.
Figure 11
Bar Graph showing frequency of interaction with MFI staff
Frequency of interaction with MFI staff

30
25 24
22
20
15
10
5 4
0
0
Weekly Monthly Quarterly Annually
Note: Frequency of interaction with MFI staff sourced from Table 10
2.2.5 Primary reason for joining MFI

Table 11
Primary reason for joining MFI: Frequency and Percentage
What was the primary reason for joining the

1 Access to credit 24 48
2 Savings opportunities 17 34
3 Insurance coverage 8 16
4 Financial education 1 2
22
Note: Primary reasons for joining MFI sourced from Household Survey, 2024
Table 11 shows the primary reasons for the 50 survey respondents to join their respective
microfinance institutions (MFIs). The most common reason, cited by 48% or 24
respondents, is access to credit. The second most common reason is savings
opportunities, which was the primary reason for 34% or 17 respondents. Insurance
coverage was the primary reason for 16% or 8 respondents, while financial education was
the primary reason for only 2% or 1 respondent.
Figure 12
Pie Chart showing primary reason for joining MFI
Primary reason for joining MFI

Financial education
2%
Insurance coverage
16%
Access to credit
Savings opportunities
Insurance coverage
Access to credit Financial education
48%
Savings opportunities
34%
Note: Primary reasons for joining MFI sourced from Table 11
2.3 Income and Expenditure
Microfinance transforms household finances, boosting incomes through loans and

savings. Before MFIs, incomes were diverse, from wages to small businesses. After
joining, incomes rose, fueled by MFI support. Loans or savings were used for business
expansion and essential expenses like education and healthcare. MFIs play a crucial role
in enhancing incomes and facilitating strategic investments for long-term financial
stability.
23
2.3.1 Household income before and after joining MFI

Table 12
Average Household income before and after joining MFI: Frequency and Percentage
Before joining MFI After joining MFI

S. Average Monthly Household Frequenc Percentag Frequenc Percentag
N Income y e y e
1 Less than NPR 10,000 4 8 0 0
2 NPR 10,001-NPR 20,000 19 38 3 6
3 NPR 20,001-NPR 30,000 22 44 14 28
4 NPR 30,001- NPR 40,000 4 8 20 40
5 NPR 40,001-NPR 50,000 1 2 10 20
6 More than NPR 50,000 0 0 3 6
Note: Household income before and after joining MFI sourced from Household Survey,
2024
Figure 13
Bar Graph showing household income before and after joining MFI
Household income before & after joining MFI

25
22
20
20 19
15 14
Before joining
MFI
10
10
After joining
5 4 4 MFI
3 3
1
0 0
0
Less than NPR 10,001- NPR 20,001- NPR 30,001- NPR 40,001- More than
NPR 10,000 NPR 20,000 NPR 30,000 NPR 40,000 NPR 50,000 NPR 50,000
Note: Household income before and after joining MFI sourced from Table 12
2.3.2 Increase in household income

Table 13
Change in household income: Frequency and Percentage
S. N Has your household income increased since joining Frequency Percentage

24
the MFI?
1 Yes 50 100
2 No 0 0
Note: Change in household income sourced from Household Survey, 2024
Table 13 shows that all 50 survey respondents (100%) reported an increase in their
household income since joining the microfinance institution (MFI). None of the
respondents (0%) indicated that their household income had not increased. These findings
suggest the MFI's services and support have been highly effective in improving the
financial well-being of the participating households.
Figure 14
Pie Chart showing change in household income
Change in household income
Yes
No
Yes
100%
Note: Change in household income sourced from Table 13
Table 14
Percentage increase in household income: Frequency and Percentage
By how much has your average monthly Frequenc

S. N household income increased? y Percentage
25
1 Less than 10% 7 14

2 10-25% 30 60
3 26-50% 13 26
4 More than 50% 0 0
Note: Percentage increase in household income sourced from Household Survey, 2024
Table 14 shows 60% of the 50 respondents reported a 10-25% increase in their average
monthly household income since joining the microfinance institution (MFI). 26% saw
income growth of 26-50%, while 14% had less than 10% increase. None reported over
50% income growth. These findings suggest the MFI enabled moderate income
improvements for most clients, with some experiencing more substantial gains.
Figure 15
Pie Chart showing percentage increase in household income
Percentage increase in household income

Less than 10%
14%
26-50%
26%
Less than 10%

10-25%
26-50%
More than 50%
10-25%
60%
Note: Percentage increase in household income sourced from Table 14
2.3.3 Sources of household income

Table 15
Main Sources of household income: Frequency and Percentage
S. N What are the main sources of your household Frequency Percentage

26
income?
1 Agriculture (framing, livestock) 27 54
2 Small Business 22 44
3 Wage Employment 17 17
4 Remittance 6 12
Note: Main Sources of household income sourced from Household Survey, 2024
Table 15 shows agriculture (54%) and small businesses (44%) as the top sources of
household income for the 50 MFI client respondents. Wage employment (34%) and
remittances (12%) were less common income sources. This indicates a focus on
agricultural livelihoods and self-employment activities among these MFI participating
households.
Figure 16
Bar Graph showing sources of household income
Sources of household income

30
27
25
22
20
17
15
10
6
5
0
Agriculture (fram- Small Business Wage Employment Remittance
ing, livestock)
Note: Main Sources of household income sourced from Table 15
2.3.4 Uses of loans or savings from MFI

Table 16
Utilization of loans or savings from MFI: Frequency and Percentage
27
How do you typically use the loans or savings from

S. N the MFI? Frequency Percentage
1 Invest in business 15 30
2 Household consumption 18 36
3 Emergencies/unexpected expenses 9 18
4 Education 8 16
Note: Utilization of loans or savings from MFI sourced from Household Survey, 2024
Table 16 provides insights into how the 50 respondents typically utilized the financial
services offered by the microfinance institution (MFI). The largest share, 36%, reported
using loans or savings for household consumption purposes. Meanwhile, 30% invested
these funds into business activities. 18% relied on MFI loans or savings to cover
emergencies or unexpected expenses, while 16% directed the money towards educational
costs. This data highlights that while economic investments were a key use, the MFI's
services also supported clients in meeting basic consumption needs, handling financial
shocks, and accessing education opportunities.
Figure 17
Pie Chart showing uses of loans or savings from MFI
Uses of loans or savings from MFI

Education
16% Invest in business
30%
Invest in business
Household consumption
Emergencies/un- Emergencies/unexpected
expected expenses expenses
18%
Education
Household consumption
36%
Note: Utilization of loans or savings from MFI sourced from Table 16
2.4 Assets Ownership
Microfinance transforms asset ownership, enabling respondents to expand their

portfolios. Initially, they own assets like land or livestock, but post-MFI engagement, they
28
acquire additional assets such as machinery or vehicles, often financed by MFI loans or
savings. This boosts economic resilience and fosters a heightened perception of financial
security among respondents, illustrating the transformative impact of MFIs on long-term
prosperity.
2.4.1 Assets owned before and after joining MFI

Table 17
Assets owned before and after joining MFI: Frequency and Percentage
Before Joining MFI After Joining MFI

Frequenc Percentag Frequenc Percentag
S. N Assets y e y e
1 Land 19 38 19 38
2 Livestock 21 42 16 32
3 Machinery/Equipment 8 16 12 24
Household items (furniture,
4 appliances) 12 24 37 74
5 None 11 22 0 0
Note: Assets owned before and after joining MFI sourced from Household Survey, 2024
Figure 18
Bar Graph showing assets before and after joining MFI
Assets before & after joining MFI

40 37
35
30
25 21
19 19
20 16
15 12 12 11 Before joining MFI
10 8 After Joining MFI
5
0
.
,. .
0
t
en
re
ks
e
nd
pm
itu
oc
on
La
rn
ui
st
N
ve
Eq
fu
s(
Li
y/
m
r
ne
ite
hi
ld
ac
ho
M
se
ou
H
Note: Assets owned before and after joining MFI sourced from Table 17
29
2.4.2 Financing of new asset acquisition

Table 18
Financing of new assets: Frequency and Percentage
If you have acquired new assets, how did you finance Frequenc Percentag
S. N the purchase? y e
1 MFI Loan 20 40
2 Savings from MFI 24 48
3 Other Sources (family/friends, income from business) 6 12
Note: Financing sources of new assets sourced from Household Survey, 2024
Table 18 shows that out of the 50 respondents, 48% financed new asset acquisitions
through savings from the MFI, while 40% used MFI loans for this purpose. Only 12%
relied on other sources like family/friends or business income to purchase new assets. The
data highlights how the MFI's core services of facilitating savings and providing credit
enabled a majority of clients to invest in productive assets, likely contributing to
improved livelihoods and income generation.
Figure 19
Pie Chart showing financing of new assets acquisition
Financing of new asset acquisition
Other Sources (family/friends,

income from business)
12% MFI Loan
40%
MFI Loan
Savings from MFI
Other Sources (family/friends,
income from business)
Savings from MFI

48%
Note: Financing sources of new assets sourced from Table 18

30
2.4.3 Perception of financial security

Table 19
Perceived financial security since joining the MFI: Frequency and Percentage
Do you feel more financially secure since joining the Frequenc Percentag
S. N MFI? y e
1 Yes 49 98
2 No 1 2
3 No Change 0 0
Note: Perceived financial security of respondents sourced from Household Survey, 2024
Table 19 demonstrates the microfinance institution's (MFI) remarkable impact on

enhancing financial security among clients. An overwhelming majority of 98% of the 50
respondents reported feeling more financially secure since joining the MFI, with only one
individual not experiencing this increased sense of security. The findings suggest the
MFI's range of services, including credit access, savings mechanisms, and other support,
have substantially bolstered financial resilience and stability for participating households
Figure 20
Bar Graph showing perceived financial security
Perception of financial security
No Change 0
No 1
Yes 49
0 10 20 30 40 50 60
Note: Perceived financial security of respondents sourced from Table 19

31
2.5 Access to Financial Services
MFI participation broadens access to financial services, from limited informal sources to
formal banking services like savings accounts and credit facilities. Satisfaction with MFI
services is high, reflecting their convenience and tailored support, emphasizing their vital
role in enhancing financial inclusion and well-being.
2.5.1 Access to formal financial services

Table 20
Access to financial services before and after joining the MFI: Frequency and Percentage
Access to Financial Before Joining MFI After Joining MFI

S. N Services Frequency Percentage Frequency Percentage
1 Yes 37 74 50 100
2 No 13 26 0 0
Note: Access to financial services sourced from Household Survey, 2024
Table 20 depicts the access to formal financial services before and after joining
Microfinance Institutions (MFIs) for the 50 respondents surveyed. Prior to joining an
MFI, 74% of respondents, totaling 37 individuals, reported having access to formal
financial services. However, after becoming members of MFIs, there was a notable
transformation, with all respondents, totaling 100%, indicating access to formal financial
services. This significant increase from 74% to 100% post-MFI enrollment highlights the
effectiveness of MFIs in enhancing financial inclusion within the surveyed population.
Figure 21
Bar Graph showing access to financial services before and after joining MFI
Access to financial services before & after joining MFI

60
50
50
40 37
Yes
No
30
20
13
10
0
0
Before joining MFI After joining MFI
Note: Access to financial services sourced from Table 20

32
2.5.2 Financial services accessed since joining MFI

Table 21
Financial services accessed since joining MFI: Frequency and Percentage
What financial services have you accessed since Frequenc Percentag

S. N joining the MFI? y e
1 Savings Account 41 82
2 Credit/Loan 35 70
3 Insurance 22 44
4 Money Transfer 10 20
5 Financial Education/Training 3 6
Note: Financial services accessed since joining MFI sourced from Household Survey,
2024
Table 21 illustrates the financial services accessed by respondents since joining

Microfinance Institutions (MFIs). The most commonly accessed service is a Savings
Account, utilized by 82% of respondents (41 individuals), followed by Credit/Loan
accessed by 70% (35 individuals). Additionally, 44% of respondents (22 individuals)
accessed Insurance services, while 20% (10 individuals) utilized Money Transfer
facilities. Financial Education/Training was accessed by 6% of respondents (3
individuals). This data underscores the diverse range of financial services provided by
MFIs, catering to the varied needs of their clientele and contributing to their financial
empowerment and education.
Figure 22
Bar Graph showing financial services accessed since joining MFI
Financial sercives accessed since joining MFI

45 41
40
35
35
30
25 22
20
15
10
10
3
g
5
in
in
nt
r
fe
0
n
ra
ou
e
oa
ns
nc
T
cc
n/
t/L
ra
ra
A
tio
T
su
di
gs
ey
ca
re
In
in
du
on
C
av
E
M
S
al
ci
an
in
F
33
Note: Financial services accessed since joining MFI sourced from Table 21
2.5.3 Satisfaction with MFI financial services

Table 22
Satisfaction with MFI financial services provided by MFI: Frequency and Percentage
How satisfied are you with the financial services Frequenc Percentag
S. N provided by the MFI? y e
1 Very Satisfied 20 40
2 Satisfied 29 58
3 Neutral 1 2
4 Dissatisfied 0 0
5 Very Dissatisfied 0 0
Note: Satisfaction with MFI financial services sourced from Household Survey, 2024
Table 22 outlines respondents' satisfaction levels with the financial services provided by
Microfinance Institutions (MFIs). The majority of respondents, constituting 98% (49
individuals), reported being satisfied with MFI financial services, with 40% (20
individuals) expressing being 'Very Satisfied' and 58% (29 individuals) indicating they
were 'Satisfied'. Only 2% of respondents (1 individual) reported feeling 'Neutral', while
none expressed dissatisfaction ('Dissatisfied' or 'Very Dissatisfied'). This high satisfaction
rate suggests that MFIs are effectively meeting the financial needs and expectations of
their clients, fostering trust and confidence in their services.
Figure 23
Bar Graph showing satisfaction with MFI financial services
34
Satisfaction with MFI financial services
Very Dissatisfied 0
Dissatisfied 0
Neutral 1
Satisfied 29
Very Satisfied 20
0 5 10 15 20 25 30 35
Note: Satisfaction with MFI financial services sourced from Table 22
2.6 Findings & Discussions
2.6.1 Findings
1. The study indicated a demographic preference for middle-aged individuals,
particularly those aged 35-55, who formed the majority. There was a slight gender
imbalance with more females (58%) participating than males (42%). Biratnagar-
13 showed higher engagement (56%) compared to Biratnagar-12 (44%). Most
respondents came from households with four or more members (88%), and
married individuals represented the majority (70%). Additionally, secondary
education was the most common (44%), followed by those with no formal
education (20%). These findings suggested a diverse participation in microfinance
activities, potentially contributing to economic empowerment in the studied areas.
2. The data on microfinance participation of respondents revealed that all
respondents were MFI members, with memberships ranging from less than 1 year
(6%) to more than 5 years (16%). The most common services utilized were
individual loans (62%) and savings accounts (74%). Interaction with MFI staff
was mainly monthly (48%). Primary reasons for joining were access to credit
(48%) and savings opportunities (34%). These findings emphasize widespread
MFI participation and the importance of credit and savings services in Biratnagar-
12 and Biratnagar-13.
3. The data on income and expenditure of respondents revealed significant changes
in average monthly household income after joining MFIs, with the majority
reporting increases. The income distribution shifted notably, with a decrease in
35
households earning less than NPR 20,000 and an increase in those earning
between NPR 20,001 and NPR 50,000. Most respondents (100%) reported income
increases post-MFI membership, primarily by 10-25% (60%).
4. Agriculture emerged as the primary income source (54%), followed closely by
small businesses (44%). Loans or savings from MFIs were predominantly used for
business investment (30%) and household consumption (36%). These findings
highlight the positive impact of MFIs on household incomes and their role in
supporting business development and consumption needs in Biratnagar-12 and
Biratnagar-13.
5. The data on assets ownership of respondents revealed notable changes in asset
ownership post-MFI membership, particularly in household items which increased
from 24% to 74%. Financing for new assets primarily came from savings (48%)
and MFI loans (40%). Additionally, 98% of respondents reported feeling more
financially secure since joining MFIs. These findings highlight the significant
impact of microfinance on asset accumulation and financial security in Biratnagar-
6. The data on access to financial services of respondents revealed that post-MFI
membership, all respondents gained access to financial services, with the most
utilized being savings accounts (82%) and credit/loans (70%). Satisfaction levels
were high, with 98% expressing satisfaction (40% very satisfied and 58%
satisfied) with MFI services. These findings highlighted the significant impact of
MFIs in enhancing access to and satisfaction with financial services in Biratnagar-
2.6.2 Discussions
The findings from this study align with and reinforce the existing literature on the positive
impacts of microfinance interventions on various indicators of quality of life, such as
income generation, asset accumulation, and access to financial services.
Income Generation:
Consistent with previous studies like (Khandker, 2005) in Bangladesh and (Imai, et al.,
2010) in India, the data from Biratnagar-12 and Biratnagar-13 revealed that the majority
of respondents experienced an increase in their average monthly household income after
joining microfinance institutions (MFIs). The income distribution shifted notably, with a
decrease in households earning less than NPR 20,000 and an increase in those earning
36
between NPR 20,001 and NPR 50,000. This suggests that microfinance participation has
played a role in enhancing income levels and contributing to improved economic well-
being in these regions.
Asset Accumulation:
The findings also corroborate earlier research, such as (Barnes, et al., 2001) in Uganda
and (Gardebroek & Berhane, 2011) in Ethiopia, which documented an increase in asset
ownership among microfinance participants. In Biratnagar-12 and Biratnagar-13, there
was a substantial increase in household asset ownership, particularly in household items,
after joining MFIs. Savings and MFI loans were the primary sources of financing for new
assets. This highlights the potential of microfinance in facilitating asset accumulation,
which can contribute to improved living standards and long-term financial security.
Access to Financial Services:
The study findings align with the World Bank report (Demirguc-Kunt, et al., 2014) and
research by (Brau & Woller, 2004) and (Cull, et al., 2014), which emphasized the role of
microfinance institutions in enhancing access to financial services for underserved
populations. Post-MFI membership, all respondents in Biratnagar-12 and Biratnagar-13
gained access to financial services, with savings accounts and credit/loans being the most
utilized. Additionally, satisfaction levels with MFI services were high, indicating that
these institutions effectively met the financial needs of the participants.
Overall, the findings from Biratnagar-12 and Biratnagar-13 provide empirical evidence
that supports the positive impacts of microfinance interventions on income generation,
asset accumulation, and access to financial services, as documented in various other
contexts. However, it is essential to note that while the observed impacts are generally
positive, the specific magnitudes and distributions of these impacts may vary across
different regions and populations, as highlighted by the meta-analysis by (Duvendack, et
al., 2011).
Moreover, it is crucial to consider the potential negative consequences of microfinance

interventions, such as over-indebtedness and risk exposure, as mentioned in the literature
review. While these aspects were not explicitly explored in the current study, they should
be acknowledged and addressed through appropriate program designs and regulatory
frameworks.
37
In conclusion, the findings from this research contribute to the growing body of evidence
on the positive impacts of microfinance interventions on various aspects of quality of life.
However, continued efforts are needed to tailor microfinance programs to specific
contexts, mitigate potential risks, and ensure sustainable and inclusive development
outcomes.
CHAPTER III
CONCLUSION & ACTION IMPLICATIONS
3.1 Conclusion
This research report presents the findings of a study conducted to assess the impact of
microfinance institutions on the quality of life in Biratnagar-12 and Biratnagar-13, two
densely populated urban areas in Biratnagar. The report provides context on the growth of
the microfinance sector in these areas and the objectives of evaluating income generation,
asset accumulation, and access to financial services stemming from microfinance
participation.
Through a descriptive study involving a structured survey of 50 households, the research

gathered comprehensive data on various aspects, including demographic profiles,
microfinance participation patterns, income and expenditure, asset ownership, and access
to financial services. The report presents a detailed analysis of the survey data, utilizing
percentage calculations and frequency distributions to provide insights into the
respondents' experiences and the changes observed after joining microfinance institutions
(MFIs).
The report highlights significant improvements in various indicators of quality of life

among the respondents after joining MFIs. Notably, there was a substantial increase in
38
average monthly household incomes, with the majority of respondents reporting increases
ranging from 10% to 50%. This income growth was facilitated by the access to credit and
savings opportunities provided by MFIs, enabling investments in income-generating
activities such as small businesses and agriculture.
The study also documents a remarkable rise in asset ownership, particularly in household
items, indicating an improved standard of living for the respondents. This asset
accumulation was primarily financed through MFI loans and savings, underscoring the
critical role of these financial services in facilitating long-term investments and financial
security.
Equally important, the findings highlight the enhanced access to formal financial services
and the high levels of satisfaction with MFI offerings among the respondents. The
widespread utilization of savings accounts, credit/loans, and insurance services provided
by MFIs suggests their effectiveness in promoting financial inclusion and catering to the
diverse needs of underserved populations.
The positive impacts observed in Biratnagar-12 and Biratnagar-13, as reported in the

study, align with and reinforce the existing literature on the potential benefits of
microfinance interventions. However, the report acknowledges the limitations of the
study, such as the potential for sampling bias, self-report biases, and the inability to
capture long-term effects through the descriptive research design.
Overall, this research report contributes to the growing body of evidence on the positive
impacts of microfinance interventions and reinforces the importance of such initiatives in
promoting financial inclusion, economic empowerment, and improved quality of life for
underserved communities. By addressing the limitations and leveraging the findings,
stakeholders can refine policies, strategies, and program designs to enhance the
effectiveness of microfinance interventions in achieving sustainable development goals,
particularly in urban and semi-urban contexts like Biratnagar-12 and Biratnagar-13.
3.2 Action Implications
This research report presents the findings of a study conducted to assess the impact of
microfinance institutions on the quality of life in Biratnagar-12 and Biratnagar-13, two
densely populated urban areas in eastern Nepal. The report highlights significant
improvements in various indicators of quality of life among the respondents after joining
39
microfinance institutions (MFIs), including increased household incomes, asset

accumulation, and enhanced access to financial services.
Based on the positive impacts observed and the conclusions drawn from the research, the
following action implications can be considered:
1. Expand microfinance outreach and services: The positive impacts observed in

Biratnagar-12 and Biratnagar-13 highlight the need to expand microfinance
services to other underserved urban and semi-urban areas. This can be achieved
through increased investment and collaboration between MFIs, government
agencies, and development organizations.
2. Tailor microfinance products: The research findings underscore the importance of
tailoring microfinance products to the specific needs and contexts of target
communities. MFIs should consider offering customized loan products, savings
schemes, and financial education programs that cater to the diverse income-
generating activities, consumption patterns, and financial literacy levels of their
clients.
3. Strengthen financial literacy initiatives: While the study found high levels of
satisfaction with MFI services, there is an opportunity to further enhance financial
literacy among clients. Improved financial education can empower individuals to
make informed decisions, manage their finances effectively, and maximize the
benefits of microfinance services.
4. Promote sustainable livelihood opportunities: The research highlights the role of
microfinance in supporting income-generating activities, particularly in
agriculture and small businesses. MFIs should consider integrating livelihood
development programs, vocational training, and business advisory services to
complement their financial offerings, fostering sustainable economic opportunities
for their clients.
5. Facilitate asset accumulation: The study's findings on increased asset ownership
among MFI clients suggest the need for targeted asset-building initiatives. MFIs
could explore partnerships with relevant stakeholders to provide asset transfer
programs, asset-based lending, or asset insurance products, further enhancing the
long-term financial security of their clients.
6. Strengthen monitoring and evaluation: To better understand the long-term impacts
of microfinance interventions and address the limitations of the current study,
40
MFIs should invest in robust monitoring and evaluation systems. This could
involve longitudinal studies, experimental designs, and the collection of baseline
data to track changes over time and attribute impacts more accurately.
7. Collaborate with stakeholders: Addressing the challenges and maximizing the
potential of microfinance interventions requires collaborative efforts. MFIs should
actively engage with policymakers, researchers, and community organizations to
align strategies, share best practices, and advocate for an enabling environment
that supports inclusive and sustainable microfinance initiatives.
8. Conduct further research: While this study contributes to the existing knowledge,
further research is needed to explore specific aspects of microfinance
interventions, such as the impact on different demographic groups, the role of
technology in enhancing service delivery, and the potential negative consequences
of over-indebtedness or risk exposure.
By implementing these action implications, stakeholders can build upon the positive
findings of this research and enhance the effectiveness of microfinance initiatives in
promoting financial inclusion, economic empowerment, and improved quality of life for
underserved communities in Biratnagar-12, Biratnagar-13, and beyond.
41
REFERENCES
Barnes, C., Gaile, G., Kibombo, R. & Kayabwe, S. K., 2001. The Impact of Three
Microfinance Programs in Uganda, s.l.: USAID.
Becker, G. . S., 1964. Human capital: A theoretical and empirical analysis, with special
reference to education. s.l.:University of Chicago Press.
Beck, T., Demirgüç-Kunt , A. & Levine, R., 2007. Finance, Inequality and the Poor.
Journal of Economic Growth, Volume 12(1), pp. 27-49.
Brau, J. C. & Woller, G. . M., 2004. Microfinance: A comprehensive review of the

existing literature. Journal of Entrepreneurial Finance, 9(1), pp. 1-27.
Coleman, J. . S., 1988. Social capital in the creation of human capital. American Journal
of Sociology, Volume 94, pp. S95-S120.
Cull, R., Demirgüç-Kunt , A. & Morduch, J., 2014. Banks and Microbanks. ournal of
Financial Services Research, 46(1), pp. 1-53.
Delarnarca, D. . S., 1994. Household portfolios. Journal of Rural Development, Volume

14(2), pp. 267-736.
42
Demirguc-Kunt, A., Klapper, L., Singer, . D. & Oudheusden, P. V., 2014. The Global
Findex Database 2014: Measuring Financial Inclusion around the World, s.l.:
World Bank Policy Research Working Paper.
Department for International Development (DFID), 1999. Sustainable livelihoods

guidance sheets, s.l.: s.n.
Duvendack, M., Jones, R. P., Copestake, J. & Hooper, L., 2011. What is the Evidence of
the Impact of Microfinance on the Well-Being of Poor People? EPPI-Centre, s.l.:
EPPI-Centre, Social Science Research Unit, Institute of Education, University of
London..
Gardebroek, C. & Berhane, G., 2011. Does microfinance reduce rural poverty? Evidence
based on household panel data from northern Ethiopia. American Journal of
Agricultural Economics, 93(1), pp. 43-55.
Imai, K. S., Arun, T. & Anni, S. K., 2010. Microfinance and Household Poverty
Reduction: New Evidence from India. World Development, 38(12), pp. 1760-
1774.
Kabeer, N., 1999. Resources, agency, achievements: Reflections on the measurement of

women's empowerment. In: Development and Change. s.l.:Wiley-Blackwell, pp.
435-464.
Khandker, S. R., 2005. Microfinance and Poverty: Evidence Using Panel Data from
Bangladesh. The World Bank Economic Review, 19(2), pp. 263-286.
Zaman, H., 1999. Assessing the poverty and vulnerability impact of micro-credit in
Bangladesh: A case study of BRAC, s.l.: World Bank.
43
APPENDIX I
Dear Respondent,
Greetings! I am Prajwal Thapa, a final-year student of Bachelor of Business

Administration (BBA) at Mahendra Morang Adarsh Multiple Campus, currently in
the seventh semester.
I am conducting a research study to assess the 'Impact of microfinance institutions on

the quality of life'. This study aims to gather valuable insights from individuals who
have availed microfinance services. Your participation in this study would be highly
appreciated and would contribute significantly to the understanding of this important
topic.
I kindly request you to spare some time and fill out the enclosed questionnaire. The
questionnaire should take approximately 10-15 minutes to complete. Your responses will
be treated with utmost confidentiality, and the information provided will be used solely
for research purposes.
Your participation in this study is entirely voluntary, and you have the right to withdraw
at any time without any consequences. However, your cooperation would be invaluable in
generating accurate and reliable data for this research.
44
Thank you in advance for your time and cooperation. Your contribution to this research
will be greatly appreciated.
Sincerely,
Prajwal Thapa
BBA, 7th Semester
Mahendra Morang Adarsh Multiple Campus (MMAMC)
Section 1: Respondent Information
1.1 Name:
1.2 Age:
a) 25 – 35
b) 35 – 45
c) 45 – 55
d) Above 55
1.3 Gender:
a) Male
b) Female
c) Prefer not to say
1.4 Location:
a) Biratnagar-12
b) Biratnagar-13
1.5 Household size:
45
a) 2
b) 3
c) 4
d) 5
e) 6 and more
1.6 Marital status:
a) Single
b) Married
c) Divorced/Separated
d) Widowed
1.7 Education level:
a) No formal education
b) Primary
c) Secondary
d) Higher education
Section 2: Microfinance Participation
2.1 Are you a member of any microfinance institution (MFI)?
a) Yes
b) No
2.2 How long have you been a member of the MFI?
a) Less than 1 year

b) 1-3 years
c) 3-5 years
d) More than 5 years
2.3 What services have you received from the MFI? (Select all that apply)
a) Individual loan
b) Group loan
c) Savings account
d) Insurance
e) Business development services
46
2.5 How often do you interact with the MFI staff?
a) Weekly
b) Monthly
c) Quarterly
d) Annually
2.6 What was the primary reason for joining the MFI?
a) Access to credit
b) Savings opportunities
c) Insurance coverage
d) Financial education
Section 3: Income and Expenditure
3.1 What was your average monthly household income before joining the MFI?
a) Less than NPR 10,000

b) NPR 10,001 - NPR 20,000
c) NPR 20,001 - NPR 30,000
d) NPR 30,001 - NPR 40,000
e) NPR 40,001 - NPR 50,000
f) More than NPR 50,000
3.2 What is your current average monthly household income?
a) Less than NPR 10,000

b) NPR 10,001 - NPR 20,000
c) NPR 20,001 - NPR 30,000
d) NPR 30,001 - NPR 40,000
e) NPR 40,001 - NPR 50,000
f) More than NPR 50,000
3.3 Has your household income increased since joining the MFI?
47
a) Yes
b) No
3.4 If yes, by how much has your average monthly household income increased?
a) Less than 10%

b) 10-25%
c) 26-50%
d) More than 50%
3.5 What are the main sources of your household income? (Select all that apply)
a) Agriculture (farming, livestock)

b) Small business/entrepreneurship
c) Wage employment
d) Remittances
3.6 How do you typically use the loans or savings from the MFI?
a) Invest in business
b) Household consumption
c) Emergencies/unexpected expenses
d) Education
Section 4: Asset Ownership
4.1 Did you own any of the following assets before joining the MFI? (Select all that
apply)
a) Land
b) Livestock
c) Machinery/Equipment
d) Household items (e.g., furniture, appliances)
e) None
4.2 Have you acquired any new assets since joining the MFI? (Select all that apply)
a) Land
b) Livestock
48
c) Machinery/Equipment
d) Household items (e.g., furniture, appliances)
e) None
4.3 If you have acquired new assets, how did you finance the purchase?
a) MFI loan
b) Savings from MFI
c) Other sources (e.g., family/friends, income from business)
4.4 Do you feel more financially secure since joining the MFI?
a) Yes
b) No
c) No change
Section 5: Access to Financial Services
5.1 Did you have access to formal financial services (e.g., bank accounts, loans) before
joining the MFI?
a) Yes
b) No
5.2 Has your access to financial services improved since joining the MFI?
a) Yes
b) No
c) No change
5.3 What financial services have you accessed since joining the MFI? (Select all that
apply)
a) Savings account
b) Credit/Loan
c) Insurance
d) Money transfer
49
e) Financial education/training
5.4 How satisfied are you with the financial services provided by the MFI?
a) Very satisfied
b) Satisfied
c) Neutral
d) Dissatisfied
e) Very dissatisfied
50
APPENDIX II
51
52
53
54
55
56
57
58

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ASSESSING THE IMPACT OF MICROFINANCE INSTITUTIONS ON

QUALITY OF LIFE IN BIRATNAGAR-12 AND BIRATNAGAR-13

A Summer Project Work Report

Exam Roll No.: 24133/19

TU Registration No.: 7-2-0003-2046-2019

Mahendra Morang Adarsha Multiple Campus

In partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

Date: April, 2024

The project work report entitled 'ASSESSING THE IMPACT OF MICROFINANCE

Dr. Bhabishya Kumar Mishra

Date: April, 2024

Dr. Bhabishya Kumar Mishra Dr. Mohan Kumar Subedi

Chairman, Research Committee Director, FOM

Date: April, 2024 Date: April, 2024

I would like to express my sincere thanks to whole Faculty of Management, MMAMC

1.1 Context Information........................................................................................................1

1.2 Objective of the study.....................................................................................................2

1.3 Significance of the study..................................................................................................2

1.4 Literature Review............................................................................................................3

1.4.1 Theoretical Review.........................................................................................................3

1.4.2 Empirical Review............................................................................................................4

1.4.3 Gaps in existing literature...............................................................................................6

1.5 Conceptual Framework...............................................................................................6

1.6 Research Methodology...............................................................................................7

1.6.1 Description of the Study Area:.................................................................................7

1.6.2 Research Design......................................................................................................7

1.6.3 Population and sample............................................................................................8

1.6.4 Data Collection and Procedure................................................................................8

1.6.5 Tools and Techniques of Data Analysis....................................................................8

1.7 Limitations of the Study..................................................................................................9

chapter II data presentation and analysis....................................................................................10

2.1 Respondent Profile........................................................................................................10

2.1.1 Age of respondents...............................................................................................11

2.1.3 Location of respondents........................................................................................13

2.1.4 Household Size of respondents.............................................................................14

2.1.5 Marital Status........................................................................................................15

2.1.6 Educational Level...................................................................................................16

2.2 Microfinance Participation............................................................................................17

2.2.1 Membership in MFI...............................................................................................17

2.2.2 Duration of MFI membership................................................................................18

2.2.3 Services received from MFI...................................................................................19

2.2.4 Frequency of interaction with MFI staff................................................................20

2.2.5 Primary reason for joining MFI..............................................................................21

2.3 Income and Expenditure...............................................................................................22

2.3.1 Household income before and after joining MFI...................................................22

2.3.2 Increase in household income...............................................................................23

2.3.3 Sources of household income................................................................................25

2.3.4 Uses of loans or savings from MFI.........................................................................26

2.4 Assets Ownership..........................................................................................................27

2.4.1 Assets owned before and after joining MFI...........................................................27

2.4.2 Financing of new asset acquisition........................................................................28

2.4.3 Perception of financial security.............................................................................29

2.5 Access to Financial Services...........................................................................................30

2.5.1 Access to formal financial services........................................................................30

2.5.2 Financial services accessed since joining MFI........................................................31

2.5.3 Satisfaction with MFI financial services.................................................................32

2.6 Findings & Discussions...................................................................................................33