ABSTRACT
Many poor households in the developing world supplement their limited incomes with remittances and microfinance. Much of the literature assumes upward social mobility and economic development from increased household expenditures in nutrition, health, education, and housing driven by remittances and/or microfinance. Remittances are the portions of wages that workers send to family members living in other countries. Microfinances are the loans given to the poor, who would otherwise have no access to formal credit. Poor people are often excluded from formal bank loans because they have no collateral to offer as security of repayment. Remittances are the money or in-kind transfers that migrants send back home. Both microfinance and remittances are used to increase household income, and they both operate on the basis of social capital - that is, trust networks of existing relationships among people. Nepal is a landlocked country between China and India with a population of more than 30 million.
