Paradigm Shift of Microfinance Institutions in Nepal: A Mixed Method Approach

Dr. Sanjib Sherpa ()
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Dr. Sanjib Sherpa: School of Business, University of Central Lancashire, Preston, Lancashire, PR1 2HE, United Kingdom

NRB Economic Review, 2025, vol. 36, issue 1, 34-49

Abstract: This study examines how the transformation of MFIs from non-profit to profit-oriented has impacted their performance in Nepal. A mixed-method approach was applied where quantitative data was analysed using a Propensity Score Matching (PSM), followed by a qualitative thematic analysis. The results show that the transformation of MFIs reduces their profitability and operational self-sufficiency in the short run but increases them in the long run. Furthermore, the study found that the number of clients and the loan size of profit-oriented MFIs are increasing in Nepal, which suggests that MFIs in Nepal are drifting away from their main mission of social welfare, also known as mission drift.

JEL-codes: C01 G21 L31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nrb:journl:v:36:y:2025:i:1:p:34-49

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