"Small Is Indeed Beautiful but…": The Context of Microcredit Strategies in Nepal

With the recent introduction of the Grameen Bank methodology in microcredit programs, it is hoped that rural development will finally impact poverty alleviation in Nepal. However, extreme poverty and hostile topography, and hence lack of markets, make it very difficult for any microcredit program to have much impact. It is argued here that the government should continue to place heavy emphasis on two key issues in any future program: expansion into the hills and mountain regions and specifically targeting poor women. Without these two elements, no microcredit program is going to have much impact on poverty reduction.