MICROFINANCE AND THE MULTIDIMENSIONAL EMPOWERMENT OF RURAL WOMEN: EVIDENCE FROM KAILALI DISTRICT, NEPAL

Abstract

The current research paper focuses on evaluating the effects of microfinance involvement on rural women in Nepal, Kailali District, in terms of economic, socio-cultural and household welfare. The study is based on a quantitative cross-sectional design and is based on a primary survey data of 400 women beneficiaries in four rural municipalities, namely, Bardagoriya, Janaki, Joshipur, and Kailali, in the year 2025 to evaluate multidimensional outcomes of microfinance participation in a systematic manner. To compare the change in income, savings, household expenditure, and women empowerment before and after attending microfinance programmes, the analysis uses descriptive statistics, paired sample t -tests, Wilcoxon signed -rank tests, chi -square analysis, correlation analysis, and binary logistic regression.

The findings indicate statistically significant increases in household income and savings, as well as expenditure on health and education, which means a better financial stability and welfare outcomes. Additional discussion indicates that there is significant increase in the female decision-making power and social-cultural empowerment, especially when it comes to making joint household financial decisions. The regression results point to the length of membership, successful use of productive loans, education, and general empowerment rates as high predictors of income growth, highlighting the accumulative and capability-enhancing character of the microfinance participation.

However, the paper equally reports the continuity of structural obstacles such as financial illiteracy, institutional constraints, and enshrined socio-cultural standard, which still dampen the full achievement of microfinance advantages. These institutional barriers prevent the optimum role of financial services on the welfare and empowerment of the women.

In general, it can be concluded in the paper that microfinance can be used as a successful tool of women economic and social empowerment when it is integrated into an integrated development program that includes financial services together with education, capacity building and enabling policy interventions. The paper provides context-specific empirical data of western Nepal to the existing discussions on the transformative possibilities of microfinance on gender-inclusive rural development.