Microfinance, in these days, has become a global concern. Generally, microfinance means the financial services to the poor. Most of the micro-finance initiatives have economic goals of reducing poverty and tackling the marginalization of the poor particularly the deprived section of the society. Microfinance is a mix of financial and social intermediation. It was commenced through cooperative from the mid-19th century with initiating the saving of 28 pounds from a group of factory workers of ‘Rochdale society of equitable pioneers’ in the United Kingdom. In Germany, Freidrich Raiffeisen introduced the community based credit cooperative society in 1864. It was the first Credit Organization in the world. In Asia, the concept of cooperative introduced officially in 1904 from India and further extended to other countries. Similarly, the popular model of microfinance developed in latter century is Grameen Bank model pronounced by Muhammad Yunus in 1976.
Social exclusion discourses developed in response to criticisms of the term poverty and describe the process that leads to individuals or groups being wholly or partly excluded from full participation in society. Nepal remained as Hindu kingdom for a long time; most social and cultural value has been dominated by the caste hierarchical system. Age long caste-based practices made “Dalits” most deprived in the society. Building inclusive financial system has been the global agenda since the start of twenty first century. Likewise, social inclusion has been the top political agenda around the globe.
Social Inclusion Factor established in this research is a noble tool to measure the magnitude of inclusiveness. One of the major findings is that inclusiveness promotes sustainability. Likewise, small income changes for the very poor have proportionately much greater impacts on livelihood, than those for the better off.
The research has come out with some recommendations with some new approaches in microfinance to make it more inclusive. Credit-first approach to the most deprived groups based on analyzing poverty status of the clients is one. Likewise, providing credit plus intermediation on the basis of individual capacity deprivation is other recommendation which emphasizes on individual intervention to the most deprived clients/members. Considering the complexities of MFC it has structured an approach called “community owned microfinancing” to reach down to the poorest of the poor .
Table of Contents
1. INTRODUCTION
1.1 BACKGROUND
1.2 STATEMENT OF PROBLEM
1.3. OBJECTIVES
1.4 RATIONALE OF THE STUDY
1.5 LIMITATIONS OF THE STUDY
1.6 CHAPTER PLAN
2. REVIEW OF LITERATURE
2.1 BACKGROUND
2.2 MICROFINANCE UNDER COOPERATIVES
2.2.1 COOPERATIVES
2.2.2 MICROFINANCE
2.2.3 SMALL FARMERS’ COOPERATIVES
2.3 SOCIAL INCLUSION AND DALITS
2.4 CONCLUSION
3. RESEARCH METHODOLOGY
3.1 BACKGROUND
3.2. SAMPLE DESIGN
3.3 DATA COLLECTION
3.4 DATA PROCESSING AND ANALYSIS
4. CONCEPT AND EVOLUTION OF COOPERATIVE, MICROFINANCE AND SOCIAL INCLUSION
4.1 COOPERATIVES
4.1.1 MICROFINANCE COOPERATIVE DEVELOPMENT IN NEPAL
4.1.2 DEMAND FOR AND SUPPLY OF MICROFINANCE
4.1.3 PROGRESS UPDATE OF COOPERATIVE
4.1.4 STRUCTURE OF THE COOPERATIVE MOVEMENT
4.2 MICROFINANCE
4.2.1 KEY PRINCIPLES OF MICROFINANCE
4.2.2 PATTERN OF MICROFINANCE INSTITUTIONS
4.2.3 MODEL under the legal framework
4.2.4 DICHOTOMY IN MICROFINANCE INSTITUTIONS-MINIMALIST OR INTEGRATED
4.2.5 HISTORICAL OVERVIEW OF MICROFINANCE PROGRAMME
4.2.6 SCALE OF MICROFINANCE SERVICES
4.3 CONCEPT AND HISTORICAL CONTEXT OF SOCIAL INCLUSION
4.3.1 CONCEPT OF SOCIAL INCLUSION
4.3.2 THREE MODELS OF SOCIAL INCLUSION
4.3.3 THEORIES OF DIVERSITY
4.3.4 EXCLUSION AND DALITS IN THE CONTEXT OF NEPAL
4.3.5 INCLUSION OF DALITS IN GOVERNANCE
4.3.6 ECONOMIC MARGINALIZATION OF DALITS
4.3.7 ACADEMIC STATUS OF DALITS
4.3.8 POLICY ANALYSIS
4.4 BUILDING INCLUSIVE MICROFINANCE-A GLOBAL CHAMPAIGN
5. SITUATION OF INCLUSION IN MFC
5.1 SOCIAL PERFORMANCE MEASUREMENT
5.1.1 THE IMPORTANCE OF SPM FOR NEPAL
5.1.2 SOCIAL PERFORMANCE ASSESSMENT PROCESS
5.1.3 SOCIAL PERFORMANCE ASSESSMENT TOOLS
5.1.4 SOCIAL RATING
5.2 SOCIAL INCLUSION FACTOR AS THE SOCIAL PERFORMANCE MEASUREMENT
5.2.1 GOVERNANCE
5.2.2 MANAGEMENT
5.3 VARIABLES INFLUENCING SOCIAL INCLUSION FACTOR IN MFC
5.3.1 ORGANIZATIONAL LEVEL
5.3.2 INDIVIDUAL LEVEL
5.4 ECONOMIC IMPACT IN MEMBERS/CLIENTS
5.5 DIVERSITY AND SUSTAINABILITY
6. PROBLEMS AND PROSPECTS FOR INCLUSIVENESS IN MICROFINANCING
6.1 BACKGROUND
6.2 BARRIERS OF INCLUSIVENESS IN MFCS
6.2.1 PHYSICAL BARRIERS
6.2.2 ECONOMIC BARRIERS
6.2.3. SOCIO-CULTURAL BARRIERS
7. MAJOR FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
7.1 MAJOR FINDINGS
7.2 CONCLUSION
7.3 RECOMMENDATIONS
7.3.1 INSTITUTIONAL POLICY REFORM
7.3.2 REVIEW/REFORM ON PUBLIC POLICY AND PLAN
7.3.3 STAKEHOLDERS' CONCERN
7.3.4 CIVIL SOCIETY PERSPECTIVE
7.3.5 FURTHER STUDY
Research Objectives and Thematic Focus
The primary research objective is to conduct a survey among Microfinance Cooperatives (Saving and Credit Cooperatives and Small Farmers’ Cooperatives) to evaluate their inclusiveness, specifically regarding Dalit access and representation, in order to identify barriers and recommend future strategies for inclusive development.
- Analysis of social inclusion and exclusion dynamics within rural microfinance in Nepal.
- Assessment of Dalit participation in cooperative governance and management.
- Examination of barriers to social inclusion, including physical, economic, and socio-cultural factors.
- Evaluation of the impact of inclusive microfinance practices on financial sustainability.
- Development of recommendations for institutional policy reform to improve social inclusion.
Excerpt from the Book
1.1 BACKGROUND
Agriculture is the mainstay of the Nepalese economy where nearly 76 percent of country's population is engaged in this sector. It contributes nearly 35 percent (NPC, 2007) to national GDP with an average per capita operational land holding of about 0.14 hectares for people in Terai and 0.5 hectares for the rural poor in the hills, agriculture reflects low level of productivity and absence of viable employment opportunities for the rural people. Consequently, people have low saving. This has contributed greatly to perpetuation of poverty in rural Nepal (APP, 1995, 2000).
Impact of the rapidly growing population of the country at the rate of 2.1 percent per annum (Census, 2001) has adversely affected especially the wellbeing of the deprived groups of the rural poor. Since the country is multiethnic, multi-cultural and multi linguistic, there has not been balanced inclusion of the communities in the development process and governance as well. Moreover, Dalits are most excluded section of our society even in the agriculture sector. It is because the landlessness in acute among Dalit groups and this is more so among Madeshi Dalits (Bk, 2005). Their source of food largely relied on non-Dalit households. Non-Dalit households pay Dalits in kind (grain) for their bounded (occupational) services that annual household payment is known as “Balighare” system (Bishwakarma D, 2002).
Success of any social development program highly depends on the type and capacity of the organization functioning in that sector providing services to members. As Dalits are mainly facing social exclusion in the field of development, the government policy in this sector should be to include Dalits through effective organizational set-up so that the integrated approach of the development can be achieved and eradicate rural poverty. One of such institutional arrangements in Nepal is village level Microfinance Cooperatives.
Summary of Chapters
INTRODUCTION: Introduces the research background, statement of the problem, specific objectives, and the scope of the study regarding social inclusion in microfinance.
REVIEW OF LITERATURE: Examines previous studies on microfinance, cooperatives, and social inclusion to identify research gaps, particularly regarding the Dalit community.
RESEARCH METHODOLOGY: Describes the exploratory and descriptive research design, sampling techniques, and data collection tools utilized during the field work in 2006/07.
CONCEPT AND EVOLUTION OF COOPERATIVE, MICROFINANCE AND SOCIAL INCLUSION: Provides theoretical and historical context for cooperatives and microfinance, analyzing the specific context of Dalit exclusion in Nepal.
SITUATION OF INCLUSION IN MFC: Presents empirical findings on social performance, calculating the Social Inclusion Factor and analyzing governance and management practices.
PROBLEMS AND PROSPECTS FOR INCLUSIVENESS IN MICROFINANCING: Analyzes the physical, economic, and socio-cultural barriers hindering the inclusion of Dalits in microfinance cooperatives.
MAJOR FINDINGS, CONCLUSIONS AND RECOMMENDATIONS: Synthesizes the research results and offers recommendations for policy reform and future research to enhance social inclusion.
Keywords
Microfinance, Cooperatives, Social Inclusion, Dalits, Poverty Alleviation, Financial Sustainability, Governance, Nepal, Economic Marginalization, Capability Deprivation, Credit Methodology, Rural Development, Caste System, Social Performance Measurement, Empowerment.
Frequently Asked Questions
What is the core subject of this dissertation?
The dissertation focuses on the dynamics of social inclusion and exclusion within microfinance cooperatives in Nepal, specifically investigating the access and participation of the most deprived group, the Dalits.
What are the primary themes explored in this work?
The primary themes include cooperative governance, microfinance outreach models, caste-based economic marginalization, the development of the Social Inclusion Factor (SIF), and the link between inclusiveness and organizational sustainability.
What is the primary research goal?
The goal is to assess and evaluate the inclusiveness of primary microfinance cooperatives toward Dalits and to provide evidence-based recommendations for policy improvements to achieve greater social and financial equity.
Which scientific methodology is employed?
The study uses an exploratory and descriptive research design, utilizing a multi-stage stratified sampling technique for selecting cooperatives and a snowball sampling approach for interviewing individual clients, supported by quantitative data analysis and qualitative focus group discussions.
What is covered in the main body of the work?
The work covers the evolution of the cooperative movement, a critical review of existing literature, the development of the Social Inclusion Factor (SIF) as a measurement tool, an empirical analysis of barriers to inclusion, and comprehensive policy recommendations.
How would you characterize this research using keywords?
The research is best characterized by keywords such as Microfinance, Social Inclusion, Dalits, Cooperatives, Financial Sustainability, and Caste Hierarchy.
How does the author define the "Social Inclusion Factor" (SIF)?
The SIF is an original measurement tool established in this research to quantify the magnitude of inclusiveness based on weighted average involvement across governance (committees), management (staffing), and outreach (client services), going beyond simple headcount measures.
What is the central finding regarding sustainability?
The research finds that the widely held belief that social inclusion hinders financial sustainability is a myth; instead, higher inclusiveness correlates with better financial performance, suggesting that diversity can actually enhance organizational productivity.
What specific barriers for Dalits are identified?
The study identifies physical barriers (remoteness), economic barriers (collateral requirements, "saving-first" policies), and socio-cultural barriers (caste discrimination and historical exclusion from development processes).
What is the proposed model for future microfinance?
The author recommends the promotion of a "community-owned microfinance institution" model, which serves as an improvement on the Grameen and Solidarity group models by focusing specifically on the empowerment of the most deprived groups.
- Citation du texte
- Dr. Man Bishwakarma (Auteur), 2010, Social Inclusion in Microfinance Cooperative Societies, Munich, GRIN Verlag, https://www.grin.com/document/1132021
