CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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Roadmap for microfinance workers to make microfinance services effective after the Corona epidemic

After the Corona epidemic, microfinance workers have agreed to move forward by making microfinance services more effective and poor-centric. They have made a strategy to focus on the business of the disciplined members by understanding the condition of the members while making their service efficient. With the launch of microfinance services with the main objective of alleviating poverty, microfinance workers have set a clear roadmap for the coming days after the Corona epidemic is sure to increase the number of poor.


The Center for Self-help Development had a zoom online video discussion with member microfinance institutions in Bagmati and Gandaki in (June25-26, 2020). The purpose of the discussion was to assess the impact of the Corona epidemic and lockdown on the microfinance sector and to find solutions to the problems that have emerged.


According to the participants, immediate attention should be paid to the physical and psychological condition of the employees, health security, and creation of working environment, recovery and investment conditions, the environment to provide door-to-door service, utilization of resources and labor, possibility of group operation. Therefore, it has been felt necessary to start the process of collecting the status details of the branch and staff and classifying the members according to the situation. Doing so will make the service more sustainable and effective.


In terms of members, there are new challenges and opportunities after Corona. According to the participants, most of the members' business has come to a standstill after Corona. Member's products do not get market and fair price. There is a problem in paying interest and installments. Lack of energy to start new projects for additional investment of members has created liquidity problems in the organization. Poverty is likely to increase as remittances decline. Due to this, it is important for microfinance institutions to move forward by classifying their members. Classification will make it easier to distinguish between good and bad members. In order to grow the business of a good member, it is necessary to reschedule the payment according to the income status and provide loans according to their ability.


Now, all the participants have agreed not to invest more in members that have misused their loans by taking loans from many institutions, who do not want to repay the loans. The head of the organization is in favor of adopting a flexible policy in the case of disciplined members who are unable to pay interest or loan even if they want to. In the case of disciplined members, the MFI will also make plans to invest more, reschedule and revive the business based on the problem. Microfinance institutions have also agreed to create their own network for marketing their products in the coming days.
The participants also discussed the current situation where millions of youths from abroad and cities have returned to their villages and plan to make them entrepreneurs. The conclusion of the discussion was that including the returning youths would reduce the negative impact on the economy by reducing remittances on the one hand and reduce dependence on the other. For this, the microfinance workers will make a plan by collecting the details of their skills, abilities, desires, and capital.


During the discussion, concern was expressed that the new generation could not be attracted towards the skills, knowledge, and business possessed by the members. According to the participants, the youths will migrate abroad but the enterprise or business done by the parents at home and the available skills and technology have not been handed over to the new generation. For this, it is planned to understand the desires, abilities, and skills of the children of the members who have studied up to class 10, interact with them regularly, and develop them as a new generation of entrepreneurs. The conclusion of the discussion is that as the youth and the new generation begin to become self-reliant, their dependence on domestic and other countries will decrease.


The meeting also agreed not to aggressively collect or extend loans in the current situation, to correct the problems and mistakes in the microfinance sector due to its own reasons, to visit the work area from the central office, and to build a network of microfinance institutions as sister organizations to manage member products.


During the two-day discussion, Chola Raj Sharma, Chief Executive Officer of, Chhimek Laghubitta Bittiya Sanstha Ltd,  Shova Bajracharya, Chief Executive Officer of Manushi Laghubitta Bittiya Sanstha Ltd, Hari Prasad Gautam, Assistant Chief Executive Officer of Mahila Laghubitta Bittiya Sanstha Ltd and Chief Executive Officer Bhojraj Basyal of Swavalamban Laghubitta Bittiya Sanstha Ltd were present.


Similarly, Nani Shobha Maharjan, Assistant Chief Executive Officer from Mahila Sahayogi Bachat Tatha Rin Sahakari Sanstha, Ashok Kumar Acharya, Chief Executive Officer from Jalpa Laghubitta Bittiya Sanstha, Chief Executive Officer from Mahila Sahyatra Laghubitta Bittiya Sanstha, Dr. Sumitra Manandhar Gurung, Executive Director Ram Prasad Kafle from Navpratibha Savings and Loan Cooperative Society Limited, Chief Executive Officer Rajendra Prasad Neupane from Mirmire Laghubitta Bittiya Sanstha and Deputy Chief Executive Officer Birkh Bahadur Bohra, Ram Bahadur Yadav from National Laghubitta Bittiya Sanstha, Womi Laghubitta Bittiya Sanstha Chief Executive Officer Pramesh Acharya, CYC Nepal Laghubitta Bittiya Sanstha from Sanstha Limited, Executive Director Ram Prasad Kafle from Navpratibha Savings and Loan Cooperative Society Limited, Chief Executive Officer Rajendra Prasad Neupane from Mirmire Laghubitta Bittiya Sanstha and Deputy Chief Executive Officer

 

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