KATHMANDU: The easier access to finance from formal financial intermediaries has reduced the dependency of Nepali households on money lenders for loans.

At present only 15.1 per cent of the total households borrowed from the local moneylenders, while fifteen years ago some 39.7 per cent of households were indebted to the moneylenders, according to the Nepal Living Standard Survey (NLSS)-III released by Central Bureau of Statistics (CBS).

The drastic drop in the householders’ borrowing from moneylenders can be attributed to easier access to finance in recent years due expansion of financial intermediaries.

The financial service providers lend money at sound interest rate with reasonable collateral unlike moneylenders that charge exorbitant

interest rate, according to

a banker.

The public are turning towards organised financial service providers such as commercial banks, development banks, finance companies, microfinance banks, credit and saving co-operatives and financial NGOs have reached to most of the rural areas.

The survey’s results indicated that the households are accessing more loans from co-operatives, micro-credit institutions and financial NGOs. In 1995-96, only 3.3 per cent households were borrowing from co-operatives and micro-credit organisations which has increased to 13.8 per cent in the 15 years.

The emergence of these micro-credit institutions has definitely helped the deprived people access the formal finance at reasonable interest rate.

“Though the growing number of financial intermediaries is not as successful as expected in increasing the financial accessibility, the expansion has definitely helped in general population’s access to finance,” said spokesperson for Nepal Rastra Bank (NRB) Bhaskar Mani Gyanwali.

Third NLSS report also revealed that 20 per cent of households have borrowed money from banks which was