Serious indebtedness among Nepal's rural peasantry has been identified and has been the focus of periodic reforms since the time of King Prithvi Narayan Shah. Despite this, indebtedness remains a pervasive and unresolved problem throughout the country. Chronic debt is aggravated by exorbitant rates of interest and consumes limited household budgets, already strained by low and often declining productivity in traditional agriculture. Thus debt may remain one of the fundamental economic problems in remote hill districts of Nepal.
