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Rural Credit Market Operations in Nepal : The Case of Palpa District


  • Tula Raj Basyal

    (Nepal Rastra Bank)


Rural credit markets, whether formal or informal, play a pivotal role in transforming the rural economy through financialisation of savings and augumentation, on of production, employment, income and productivity levels. Coverage of informal credit agencies predominate the rural credit market in Nepal. Accessibility, acquaintanceship and flexibility in credit transactions of informal credit agency as compared to various formalities and regidities of the formal or banking institutions have led the users to the informal sector in rural areas. Flexibility in terms of loan delivery, repayments and rescheduling in the informal credit market have added charms among credit receipients. Tapping of strength and potentials of the rural informal credit market becomes instrumental in the process of devising a sustainable and credit strengthening system in the rural economy. However, a legislation encouraging and regulating the operations of financial intermediation is the need of the hour.

Suggested Citation

  • Tula Raj Basyal, 1999. "Rural Credit Market Operations in Nepal : The Case of Palpa District," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 11, pages 35-49, April.
  • Handle: RePEc:nrb:journl:v:11:y:1999:p:35-49

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