Cutting Out the (Middle) Man in Kathmandu

Chris Baker, KF11, Nepal

Much has been written about the value of investing in women.  The Girl Effect theory says that women are simply better investments when compared to their male counterparts.

With access to capital, women are empowered.  They buy the things their families need.  They educate their sons and daughters.  The investment of initial capital is magnified and extended, right?

But what does the Girl Effect look like on the ground?

What else happens when you invest in women?

Meet Laxmi*.  Laxmi makes intricate metal statuettes representing Buddhist and Hindu deities.  Laxmi buys wax molds, raw metals, and finishing tools for her small operation.  She works on the statuettes in low lit room near Patan’s Durbar Square, south of the capital of Kathmandu.

Patan has been the heart of Nepali religious and artisan culture for over 2,000 years.  The figures formed in Laxmi’s hands reflect those etched into red clay temples throughout the ancient city.  The details are ornate and the finished products fill the craft shops frequented by tourists and collectors.

Laxmi’s final product will sell for close to USD $100 but she’ll receive about USD $10 for the time that it takes her complete the statuette.  She buys her materials from a middleman to whom she will then sell the finished product minus the cost of materials.  Laxmi’s lack of capital keeps her at the bottom of the supply chain.

With a loan of Rs. 10,000 (about $135), Laxmi is able to purchase raw materials in cash.  She is able to buy materials at a lower price and in amounts that allow her to work on several pieces at a time.  By avoiding a debt with a middle man, Laxmi is able to sell her goods directly to store owners or negotiate better terms with other buyers.  Laxmi’s $10 take now doubles.

Laxmi’s seemingly small move up market is representative of a much more profound impact of the Girl Effect in Kathmandu.  In Nepal, women are denied access to bank capital because of a lack of collateral.  Without collateral, women operate at the edges of the economy, kept there by barriers of genders and tradition.  But with $135, Laxmi changes the rules.

Laxmi finds a strategic edge.  Laxmi makes the market more efficient.  Laxmi cuts out the middle man.


Learn more about Kiva borrowers in Nepal here.

Invest in women like Laxmi here.

*Name changed for reasons of privacy.

About the author

Chris Baker