Following Best Practices in Microfinance: The case of Disabled People’s Organisations in Nepal

Abstract: Microfinance has generally been acclaimed as one way to reduce poverty through the provision of financial services targeting the previously “unbankable” poor. Persons with Disabilities (PWDs) are amongst society’s most excluded groups financially and the absence of PWDs within mainstream Microfinance urges Disabled People’s Organisations (DPOs) to directly engage in Microfinance. The practices by such alternative actors are suggested to be generally rejected because they risk being inefficient and failing. The objective of this study is to analyse examples of how DPOs in Nepal practice Microfinance and whether they generally follow recommended best practices. The correlation with what is perceived as best practices provide evidence to suggest whether the DPOs’ practices should be generally rejected or motivated as plausible and justified accordingly. To accomplish this, a well-justified analytical framework of recommended best practices for DPOs engaged in Microfinance is created, and field research is undertaken in Nepal, April-May 2014. It can be concluded that recommended best practices are followed at a general level; however, the extent varies within and between the analysed practices. The results provide sufficient evidence to suggest that the practices are plausible and justified accordingly, and should not be generally rejected.