Women’s Participation in the Formal Financial Market in Nepal: Evidence from NLSS III Data

Abstract

This study attempts to determine factors that influence women’s autonomy and empowerment in Nepal, particularly whether there is gender bias on access to formal sources of credit. We look at women’s land ownership status, access to credit from formal and informal financial institutions, decision to work outside of family, input to decision making on such family matters as accessing health services by a woman for herself and her children, sending children to school, and handling family finance. A probit model is applied to data from a living standard survey (NLSS III) for the borrowing households to see whether there is a gender-specific difference in participation in the organized credit market. The results do not display a significant difference between male and female borrowers. We also find that women-headed households borrow a larger amount on average than do male-headed households and discuss possible reasons for this. This raises the question about possible exclusion of many women who may not participate in the formal credit market and hence are not captured by the data on borrowing households. In addition to further investigation into a definitive answer to this question, future research can look into the existence or extent of discrimination along socio-demographic dimensions such as geographic region, economic status, caste or ethnicity. (210 words)

Keywords: Women’s participation, Formal financial market, Nepal, survey data, Probit model.