Deprived Sector Lending by

Nepalese Commercial Banks

Presented by:
Sujita Adhikari
Topics to be Discussed
Introduction
Literature review
Research methodology
Data presentation and analysis
Summary, conclusions and research
implications

Introduction
Background of the study
Statement of the problem
Objectives of the study
Significance of the study
Limitation of the study
Organization of the study

Background of the study
For the upliftment of the rural people
and economic development of a
country as a whole, the government
has initiated different priority sector
lending programs focusing for poverty
alleviation.
Under priority sector, the development
of domestic cottage industry,
agriculture sector and services of
lower income group people are mainly
considered.


Statement of the problem
What kind of programs and policies are
available in DSL of Nepalese commercial
banks?
What practices are really adopted by
commercial banks in deprived sector
lending?
Does these DSL programs are effective
enough to reduce the poverty?

Objectives of the study
To explore the deprived sector
investment patterns of commercial
banks.
To evaluate the programs and
practices on deprived sector lending.
To examine issues and challenges
faced by commercial banks while
lending to deprived sector.
Significance of the study
This research will be important for the
bankers, planners, policy makers,
international donor agencies,
economists who have been
endeavouring day and night for the
alleviation of poverty in Nepal.
Limitations of the study
This study is based on the data of 10 years period
from FY 2002/2003 to 2010 to 2011, and the
conclusion drawn confines to the above period
only.
This study is mainly based upon secondary data;
primary data is for only subjective study.
This study concentrates on DSL Program
launched by sample banks not the whole banking
programs.
This study does not analyze the number of
borrowers that have been benefited through
Deprived Sector Lending of sample bank in
relation to the total population of the nation.

Literature review
Conceptual review
Review of NRB directives
Review of related studies
Research methodology
Research design
Population and sample
Sources and method of data collection
Data analysis tools
Population & sampling
There are altogether 32 commercial
banks functioning in Nepal. Thus 32
commercial banks are taken as the
population.
To study the trends of deprived sector
investment, i have taken 11
commercial banks as a sample. The
banks having 15 years of their
operation taken as a sample.

Sources and methods of data
collection
Secondary sources of information
Annual reports of the banks.
Published and unpublished bulletins,
reports of the banks
Previous thesis
Banking and Financial statistics
report of Nepal Rastra Bank
Annual Bank Supervision Report of
Nepal Rastra Bank etc.

Contd...........
Primary sources of information
For primary information, I have conducted
structured or personal interview with
particular banks credit officers.
The study is mainly based on secondary
informations, primary informations are
used only to find out the current scenario
of DS investment.
Where i have prepared interview schedule
and ask such types of questions:

Contd.........
What is the amount, level, percentage
of investment in Deprived Sector?
How banks are supposed to provide
loan in deprived sector?
Which sector did you prefer while
lending in Deprived Sector Credit
Programs?
What are the issues and challenges
faced by your bank with regard to DS
lending? Etc.

Data presentation &
analysis
This chapter is the major part of the
study. Basically, it deals with various
aspects of DS these are as follows:
Evolution concept of DSL
Minimum requirement under NRB
directives
Modalities of Nepalese micro finance
sector
Interest rate structure in DSLP
Poverty reduction through micro-finance
Contd................
Investment pattern on DSL of
commercial banks
Penalty for non-compliance of DSLP
Primary data analysis

Primary informations are used to find
out the current scenario of deprived
sector investment.

Summary, conclusion and
research implications
Deprived Sector Lending Programme
was devised as a banking programme to
connect with lower strata of the
population and increase their living
standard by means of extending credit
facilities to the productive activities
initiated by them.
The impact of this programs is very
appreciated.

Conclusions,
Through this study i can find the true
picture of deprived sector investment
of commercial banks. How these
programs are perceived by banks.
The concept of deprived sector
investment is very effective in
developing country like Nepal.
The implementation part of this
programs is very poor.
Contd.......
There is lack of proper mechanism to
monitoring the implement aspect of
this programs.
I believe that the effectiveness of this
programs is increased if there is
proper monitoring mechanism to
directed the various aspects of the
study.
Research implications
This research study will be help full for
the planners, policy makers to develop
appropriate policy to cope with rural
areas human resource.
This research will also provide huge
information to bankers, small investors
to allocate the proper financial
resources in DS.
This study would be the reference for
further research on the same topic.

Thank You!!!