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The First Provincial Microfinance Members' Summit of Koshi Province Concluded with 14-point Declaration

The First Provincial Microfinance Members' Summit of the Koshi Province was concluded with the vow to make microfinance services civilized, dignified and effective and also decided to dedicate it to its target groups for raising their living standards. The Summit was held on February 12, 2023 in Biratnagar, the capital of Koshi Province. It passed 14-point Declarations unanimously.

The Summit resounded the slogan “Expand Enterprise to Each Household and Reduce Poverty to Zero”. The representatives of the participating organizations discussed on the different dimensions of the microfinance including the present situation of the microfinance. They agreed to act together to overcome the current crisis by eradicating the weaknesses seen in the MFIs and cooperatives in the process of the implementation of microfinance service delivery and act urgently to increase the entrepreneurship among the members. The declaration of the summit has stated to formulate a clear action plan and implement with concrete programs to protect the members from the excessive burden of loans. Similarly, the declaration has urged MFIs and cooperatives and their employees to increase contact with their members, award employees who have good performance and build relation with members regularly and establish an effective mechanism to listen the grievances of clients. The summit also decided to encourage youths to become self-employed, empower the members by providing financial literacy and skill development training in addition to financial services, ensure the effective utilization of the loans by the members.

The one-day Summit was held under the chairmanship of Mr. Sanjay Kumar Mandal, Chief Executive Officer of the Jeevan Bikas Laghubitta Bittiya Sanstha Ltd. The summit was inaugurated by Honorable Minister for Women, Children and Senior Citizens, Ms. Bhagawati Chaudhary.

Addressing the opening session, Minister Chaudhary said, “Microfinance program is a campaign against poverty alleviation started for the poor and underprivileged women. They can take credit services and become entrepreneurs to raise their living standard. However, the loan should be used for the purpose for which the loan is taken. Microfinance program has played an incomparable role for the empowerment of the deprived women in Nepal and it should be further developed as a clean and service-oriented business for social transformation.”

Speaking at the closing ceremony of the conference, Member of Federal Parliament Mr. Yogendra Mandal said, “Microfinance is an effective program of Nepal for poverty alleviation and upliftment of disadvantaged groups specially the women. For this, microfinance institutions and their members should be able to benefit by working together in accordance with the spirit and fundamentals of Microfinance.”

While addressing the conference, Guest Speaker Mr. Shankar Man Shrestha, Chairman of the Center for Self-help Development (CSD) said, “There is a mission drift in microfinance and many organizations not working in accordance with microfinance norms, ethics and values and focusing on profit making without being responsible to the members. The regulatory body Nepal Rastra Bank is also guilty of not taking the right policy.” He suggested that in order to solve the current disruptions and the problems among the members, microfinance practitioners should move ahead with the principles and spirit of microfinance and regulating authority should diligence the wrong doings.

Mr. Bam Bahadur Mishra, Deputy Governor of the Nepal Rastra Bank, stated that the problem arose because of the number of microfinance institutions which is more than the requirement of the country and promised to bring microfinance institutions to the right number in the near future.

Mr. Sanjay Kumar Mandal, Chairman of the Summit Organizing Committee and Chief Executive Officer of the Jeevan Bikas Laghubitta Bittiya Sanstha Ltd. stated that the microfinance is the best program, in which poorest of the poor can have an opportunity to thrive their living standard. He mentioned that recently some vested interest groups have tried to misinterpret this sector for their own benefits. In addition, he said that the Summit has been organized to gear up the microfinance movement with purification and making it more accessible to the poorest and most deprived group of the country.

On the same occasion, six of the participating members shared their experience on how could they upgrade themselves into entrepreneurs from the daily wage earning and changed their socio-economic status after taking loan from microfinance institution.

In the summit, three thematic sessions on Impact of Microfinance on Women and Rural Areas, Meaning of Microfinance, Financial Literacy and Customer Protection as well as the Importance of Microfinance in Nepalese context were discussed. A total of 515 participants including Board Directors, Chief Executive Officers, employees, experts, members of microfinance institutions and other stakeholders of about 21 microfinance and microfinance cooperatives had participated in the Summit.

Declaration of the 1st Provincial Microfinance Members' Summit of Koshi Province -2023
1.  To execute the slogan of the 3rd National Microfinance Members' Summit and then First Provincial Microfinance Members’ Summit “Expand Enterprise to Each Household and Reduce Poverty to Zero”
2.  As microfinance program is a tool for socio-economic transformation, the flaws and weaknesses of the micro financing organizations should be corrected and protected from future crisis.
3.  MFIs should make a well spelled out action plan to enhance the entrepreneurship of the members.
4.  In order to protect microfinance members from over-indebtedness, both the institutions and the members should be cautious to refrain from likely problems.
5.  The employees of microfinance and cooperative organizations should frequently visit their members and have regular interaction with them. Also, every organization should develop an annual reward system for the outstanding employees to boost up their morale.
6. Establish grievance handing cells in each organization and handle them effectively.
7. The employees of every microfinance and cooperative organization should treat the member well and not behave them badly.
8. MFIs and Cooperatives should motivate children of their members to become self-employed in their homestead rather than encourage them for foreign employment.
9.  Organizations should support to empower members by providing financial literacy and skill development trainings in addition to the financial services.
10. Members should make proper utilization of the loans and the concerning organizations should make timely monitoring of their members.
11. Organization will provide required financial information to the members regularly and members should repay their loans on time.
12. As per the principles of microfinance, members should be given initially small loan amount and gradually increase the size of the loan after they get required experience.
13. Members will not be limited to one business. Helps them to diversify to increase their source of income by involving in multiple potential enterprises in their area.
14. Members will be encouraged to build their own capital through regular savings and become financially sustainable.

 

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