Students' research on microcredit in Nepal published in journal

Students’ research on microcredit in Nepal is published in academic journal

March 1, 2017

Research conducted by Maryville College students visiting Nepal last summer was recently published in an international peer-reviewed academic journal dedicated to the economic issues in developing countries.

“Effect of Credit Cooperatives in Employment Generation: Evidence from Rural Nepal” appeared in the first issue of the Journal of Development of Innovations published by KarmaQuest International, Canada, and among the listed authors are Taylor Rigatti ’16 and Nick Sexton ’16. Dr. Shankar Ghimire, former visiting professor of economics at MC and a native of Nepal’s Dolakha District, led the trip and the research.

“I believe learning from the field is more effective than learning within the classrooms,” Ghimire said. “I promote internationalization in the classroom and encourage my students to go for study abroad.”


The research and trip – which also included Grace Costa ’18 and David Clifford ’16 – centered on the effectiveness of microcredit in providing the rural poor of developing countries access to finance. Funding came from the Student-Faculty Fellowship (SFF) program of ASIANetwork, a consortium of 160 North American colleges that strives to strengthen the role of Asian studies within the framework of liberal arts education. Maryville College is a member, and students and faculty members are eligible to apply for annual grants.

With mentorship from Dr. Scott Henson, Maryville College associate professor of political science and previous ASIANetwork grant recipient, Ghimire wrote the grant proposal for the study in Nepal.

In selecting his student researchers, he asked other colleagues at the College for suggestions of undergraduates with good academic standing, their interest in Asia, and their research capabilities on the proposed topic. Interested students had to write an essay addressing each of these qualifications.

“The four selected were the best fit,” Ghimire said.

Rigatti, Costa and Clifford were international studies majors; Sexton was majoring in political science. The group prepared for Nepal and the research by reading papers on microfinance and the lives of poor people in Nepal and other Asian countries.

The trip was initially planned for the summer of 2015 but was put on hold after a major earthquake shook Nepal that April. Green-lighted for 2016, some of the initial plan had to be modified.

“We had to change our plans of homestay in the rural communities and stay in hotels instead,” Ghimire said. “The earthquake affected most of the houses in Dolakha region. More than 90 percent of the rural houses made of stone and clay were collapsed.”

Research abroad

The group flew out May 16 and returned to the United States on June 9. Studying the Kabre Village Development Committee (VDC), they stayed in Dolakha for 12 days. They also spent eight days in Kathmandu and two days in Nagarkot, a tourist area just outside Kathmandu.

“The main goal of the research was to analyze the effect of credit cooperatives on employment generation and business expansion in Kabre VDC,” Ghimire explained. “The research was based on both the quantitative and the qualitative data gathered from surveys, case studies and interviews.”

In microcredit, a small loan is made to a person of limited means to help him or her start a business or hire additional people for an existing business. Terms of repayment and interest are negotiated among the borrower and lender, although interest rates for microcredit tend to be higher than bank rates.

The professor and students surveyed 129 local businesses, asking owners about their knowledge of microfinance institutions, whether they had obtained loans through them, what impact the loans had had on their businesses, and whether they were able to save money. They prepared case studies on one buffalo farmer, three cardamom farmers and one medicinal herb farmer. The MC group also collected data and information from four lending institutions in Kabre.

“Out of the 129 businesses in the sample, 68 businesses used credit cooperatives as their main source of startup capital. This shows that credit cooperatives are the key to develop entrepreneurship and a major source of self-employment in the area, which is evident from the fact that at least one, if not two, of the family members is able to start a job using the credit that they borrow,” the journal article reported. “However, the findings show that the cooperatives do not have a statistical significance on business expansion. While the statistical results are somewhat counterintuitive, the results are consistent with how rural economies operate. Businesses in rural areas are mainly family owned, and the villagers are mostly concerned with the subsistence level of income. They don’t know what it’s like to have a large manufacturing or industrial firm in the area.” The full article can be accessed here.

In addition to the article in Journal of Development of Innovations, Ghimire plans to begin work on another paper with Costa and Clifford that focuses on business expansion. The group plans to attend the ASIANetwork Annual Conference in Oak Brook, Ill., in April and participate in a round table discussion and poster presentation.

“I wanted this trip to be a reality for students as this would have a tremendous impact in their personal, professional and academic lives,” Ghimire said.

Unforgettable experience

Rigatti confirmed that it has.

The 2016 trip to Nepal is something she said she will “never, ever forget.”

The Maryville native spent a semester studying abroad in Morocco during her junior year, so she was accustomed to living in a different culture, but aspects of Nepalese living still proved eye-opening.

About 80 percent of the Nepalese population lives in rural areas, and most economic activity revolves around agriculture.

“China and India are the main partners in trade but while those countries are growing, Nepal is struggling,” she said.

Their hotel in Dolakha had no electricity during the day and running water in only two rooms. The group washed their clothes by hand. The town has no paved roads.

Rigatti, who wrote her Maryville College Senior Study on the Universal Declaration of Human Rights and its western bias, said she was pleased to see that microfinance seems to be helping the Nepalese economy and therefore, the lives of the Nepalese.

“[Microfinance] not been found to work in Africa or Latin America,” she explained.

Travel and research is something she hopes to continue. Her career goals include teaching at the collegiate level.

“I enjoy bringing research and travel – experiencing a different culture – together,” she said. “By experiencing Morocco and Nepal, I feel I have better, stronger worldviews, economically and politically.”

For more student reaction, visit the ASIANetwork Student-Faculty Fellows program webpage.

By Karen Beaty Eldridge '94, Executive Director for Marketing & Communications


Maryville College is ideally situated in Maryville, Tenn., between the Great Smoky Mountains National Park and Knoxville, the state's third largest city. Founded in 1819, it is the 12th oldest institution of higher learning in the South and maintains an affiliation with the Presbyterian Church (USA). Known for offering its students a rigorous and highly personal experience that includes an undergraduate research requirement, Maryville College is a nationally ranked institution of higher learning that successfully joins the liberal arts and professional preparation. Total enrollment for the Fall 2017 semester is 1,181.