Problems of Rural & Micro Credit Operations

The problems of Rural and Micro Credit operations in Nepal can be summarized as below:

• Presence of a number & variety of rural & micro financial institutions;
• Lack of co-ordination between various rural & micro financing institutions & programmes;
• Duplication & overlapping;
• Micro-Credit is costlier activities ( operating cost is relatively high);
• Limited outreach (about 20 percent of the total rural & micro credit demand is supplied by the    formal       sector);
• Heavy concentration in the Tarai (plain) region;
• Difficulties in extending the micro credit service in the hilly & mountainous region (About 68 % of the total land is covered by the region);
• Lack of Proper regulation & supervision;
• Legal  hindrance; etc.
• Security aspect due to the Maoist activities is seems to be a serious problem.