Microfinance Syllabus - BBA (PU)

Course Objectives

The purpose of the course is to provide students the principles and practices of microfinance

institutions and microfinance services. The course also emphasizes on improving skills of the

students to prepare microenterprises business plan for self-employment opportunities.

Course Description

This course provides an understanding of the basic principles, practices and services of microfinance industry. It begins with an introduction to microfinance in general and microfinance lending models in particular. Then it proceeds to discussion of various types microfinance institutions and explores their role in development of different sectors of an economy. The course also gives an overview of regulatory regime of microfinance in Nepal. Finally, it deals with entrepreneurship and develop business plan suitable for micro financing.

Course Outcomes

By the completion of this course, the students should be able to:

• explain the nature of microfinance and microfinance models;
• identify the role of microfinance institutions in social and economic development;
• choose appropriate model of microfinance institutions and develop microfinance products;
• familiarize with the microfinance programs in Nepal and appreciate their role in different aspects of national development;
• understand the rules and regulations of microfinance industry in Nepal and apply them in the establishment and operation of microfinance institutions in Nepal;
• prepare micro/ small enterprise business plan; and
• demonstrate ability to conduct the case studies of microfinance institutions.

Course Contents

Unit I: Introduction to Microfinance                                                                        6 hours

Concept and meaning of microfinance; history of microfinance; need of microfinance; key

principles of microfinance; microfinance client; microfinance products: microcredit, micro

saving, micro insurance, payment and transfers; and distinction between traditional financing

and micro financing.

Unit II: Micro Entrepreneur and Microfinance                                                       6 hours

Concept and importance of micro enterprises and entrepreneurs; business plan for micro

enterprises, preparation of business plan.

Unit III: Microfinance Credit Lending Models                                                       6 hours

Individual lending model; Grameen Bank solidarity lending model; village banking model;

cooperative model; self-help group model; rotating savings and credit association, and

lending models in Nepal: wholesale lending – RSRF and RMDC, retail lending.

Unit IV: Microfinance Institutions                                                                           6 hours

Objectives of the microfinance institutions; importance of microfinance institutions;

attributes of a good microfinance institutions; institutional types; formal financial institutions;

semiformal financial institutions; and informal financial providers.

Unit V: Microfinance and Development                                                                  4 hours

Microfinance and women empowerment; microfinance and health; microfinance and

microenterprise development; microfinance and education; microfinance and networking;

micro insurance policies and practices; and challenges and way outs.

Unit VI: Microfinance in Nepal                                                                                8 hours

National microcredit policy; poverty and microfinance in Nepal; development of

microfinance sector in Nepal; preview of microfinance models in Nepal; and critical elements

of success in Nepal's micro financing.

unit VI: Regulations of Microfinance Institutions                                      6 hours

Need for regulation; regulations of microfinance industry and small enterprises: registration,

operation and reporting; regulating authorities; and relevant acts and byelaws.

Unit VII: Processes and Interest Rates for Microfinance                          6 hours

Sources and process of microfinance; Challenges and difficulties in the process; Cost of

finance: interest rate, subsidy schemes and plans, transaction costs for micro entrepreneurs,

challenges in costs and interest rate, and way outs.

References

1. Ledgerwood, J. The new microfinance handbook. Washington, DC: The World Bank.
2. Panda, D. K. Understanding microfinance. New Delhi: Wiley India.
3. Marguerite S. R. The microfinance revolution. Washington, DC: The World Bank.
4. Shah, R. K. Microfinance in Nepal. New Delhi: Serials Publications.
5. Agrawal, G. R. Entrepreneurship development in Nepal. Kathmandu: MK Publishers and Distributors.
6. Sharma, P. R. Impact of microfinance on women empowerment. Pokhara: Team Organizing Local Institution.
7. Sharma, P. R. Sustainability of microfinance institutions: an opinion survey. Pokhara: Team Organizing Local Institution.
8. Government of Nepal. National microcredit policy 2007. Kathmandu: Nepal Rastra Bank.
9. Hisrich, R. D. Peters, M. P & Shepherd, D. A. Entrepreneurship. New Delhi: Tata McGraw Hill Education.