A Comparative Study of Rural Financial Access and Microfinance between Nepal and India

The paper focuses mainly on comparison between rural financial accessibility in India and Nepal as well as accessibility of micro-finance services in both countries. This comparison is based on the basis of household's bank account and indebtedness of formal & informal sectors (Per thousand HH bank account in both country). This paper also explores that what are formal &semi formal financial sector satisfy demand of rural financial services as well as what is microfinance able to fill this gap. This paper find out that formal &semi formal sector did not work properly in the past in outreaching development finance at a greater scale. The ultimate goal of development finance (which includes rural and micro finance) is to increase the access of rural people to all types of financial services from the organized sector. Methodology While comparison of microfinance sector is based on methodology of services provision and clients outreach. This study is based on secondary sources-NRB report, ADB report, NABARD report etc. Conclusion It has been demonstrated that micro finance is an effective and powerful tool to reduce poverty in developing countries including Nepal. The MFIs could also become a catalyst for rural development through credit delivery services to the poor people in Nepal.