Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:challenges of rural banking systems. It explores the importance of banking services in rural areas, the financial needs of rural populations, and the strategies to promote financial inclusion and rural development through banking. It also contains basic concept of microfinance and rural banking, microfinance and rural banking operations and models, microfinance and rural banking products and services, risk management in microfinance and rural banking , monitoring and evaluation of microfinance and rural banking, microfinance and rural banking policy, regulatory environment and emerging issues in microfinance and rural banking in Nepal
Course Objective
:This course provides an overview of microfinance and rural banking and i ts significance in poverty reduction and economic development. It covers the history and evolution of microfinance and rural banking, different types of microfinance institutions, and their role in providing financial services to the poor. The main purpose of this course is to acquaint students with the role and significance of microfinance and rural banking in the development of a developing country like Nepal. Besides, it also provides with the products and services and functions of microfinance and rural banking institutions operating in Nepal. The course aims to impart basic knowledge of services marketing, its marketing principles, and the integration of those principles with the real -time business environment. The course will help analyze the marketing situation and make the right decisions.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1.Basic Concept of Microfinance and Rural banking
- Definition and characteristics of microfinance and rural banking
- Differences between microcredit and microfinance
- Evolution of microfinance at national and international levels
- Perspectives and approaches to poverty
- Microfinance and social entrepr eneurship
- Differences between social and business enterprises
- Distinctions between microfinance and informal financing, and between microfinance and traditional banking
- Microfinance management and its principles.
Unit 2.Microfinance Operations and Models
- Approaches to microfinance and rural banking —welfare and institutional approaches
- Microfinance models including Grameen replication, cooperatives, FINGOs, SHGs, target group programs, wholesale lending MFIs, and others
- Purposes, features, strengths, and weaknesses of major models
- Group lending and peer pressure
- Issues such as adverse selection and moral hazard.
Unit 3.Product and Services
- Nature of microfinance products and services
- Types of products —microcredit, microsavings, microinsurance, pension and provident funds, and payment transfers
- Financial intermediation, social inter mediation, and social services
- Delivery mechanisms
- Product development processes
- Pricing of microfinance products.
Unit 4.Risk management in Rural Banking
- Nature and classification of microfinance risks
- functional risks (mission drift, staff fraud, inefficiency, poor tracking systems, donor dependence, staff turno ver)
- financial risks (interest rate risk, foreign exchange risk)
- external risks (disasters, competition, theft, regulatory changes)
- strategies for risk minimization including securitization, fraud control, MIS development, HR management, disaster risk management, secure cash handling, and hedging.
Unit 5.Regulatory Environment Microfinance and Rural Banking
- National Microfinance Policy
- regulatory authorities including Nepal Rastra Bank (NRB) and Department of Cooperatives (Do C)
- relevant laws and regulations —NRB Act, BAFIA, Cooperative Act, Financial Intermediaries Act
- NRB directives for MFIs
- PEARLS and CGAP monitoring models.
Unit 6.Financial needs and challenges of rural Areas
Needs: Agriculture finance ; Micro, small, and medium enterprises (MSMEs) ;Non-farm activities. Challenges of rural areas: Low financial literacy , l ack of infrastructure , h igh transaction costs, risk management issues.
Unit 7.Rural Banking and Sustainable Development
- Meaning and significance of sustainable development
- Impact assessments
- Contributions of rural banking to poverty reduction and women empowerment
- Inclusive growth strategies
- Alignment with UN Sustainable Development Goals (SDGs).
Unit 8.Emerging issues in microfinance and rural banking
- Digitalization in microfinance and rural banking
- Funding constraints in microfinance and rural banking
- Microfinance and rural banking in climate resilience
- Financial Inclusion
- Client protection and financial literacy.
References:
Baral, S.K. and Bihari, S.C. Rural Marketing and Micro Finance: Text and Cases . New Delhi: A.I.T.B.S. Publishers, India Ledgerwood, J. The New Micro Finance Handbook: A Financial Market System perspective. Washington D.C.: The World Bank Shrestha, S. M. State of Micro Finance in Nepal. Dhaka: Institute of Micro Finance Sharma, P.R. Sustainability of Microfinance institution: opinion Survey. Pokhara: TOLI, Sharma, P.R. Impact of Microfinance on Women Empoerment. Pokhara: TOLI The Banking with the Poor Network, Micro Finance Industry Report Nepal, Singapore: BWTP Mishra, P. K. Microfinance Management. Bhubaneswar: CENGAGE. Shah, R. K., Micro Finance in Nepal. New Delhi: Serials Publications MKM 204: Services Marketing BBM 8th Semester Credit Hours: 3 Lecture Hours: 48