Sustainable Development and Women’s Empowerment: The Role of Microfinance Institutions in Birendranagar, Surkhet

Abstract

This paper analyze the multidimensional effects of microfinance on the empowerment of women in five dimensions, namely, economic, political, social/cultural, personal, and psychological. A quantitative research design was used to conduct a study on 180 women who are actively involved in microfinance programs in Birendranagar, Surkhet, through the use of structured questionnaires. The data were to be collected in the period between September- December 2025 and the instrument was pre-tested using a pilot study involving 20 respondents to ascertain validity and reliability. IBM SPSS 25 was used to perform correlation and multiple regression analyses. The findings show that microfinance plays a significant role in empowering women in all the five dimensions. The strongest predictor was personal empowerment (β = 0.569, p < 0.001), then political ( β = 0.260) and economic empowerment (β = 0.242). The five predictors combined to account 90.6 percent of the overall women empowerment (Adjusted R2= 0.906), which shows the high transformative power of microfinance. The effects of social/cultural and psychological empowerment were relatively smaller, which indicates the continuation of socio-cultural norms and the necessity of additional psychosocial interventions. The correlation analysis also established that there were strong positive inter-relationships between all empowerment dimensions. These results highlight the significance of integrative microfinance approaches that can tackle structural and psychosocial obstacles to comprehensive women empowerment. The research has practical implications to policymakers, program designers and practitioners who want to maximise the transformative effects of microfinance in Nepalese context.