With more than 31,000 cooperatives registered in the country, of which 19,000 providing savings and credit services to people in Nepal. These include multipurpose cooperatives and savings and credit cooperatives (SACCOs). There are roughly 13,000 SACCOs, of which roughly 2,500 are members of NEFSCUN (the apex institution for cooperatives). Most cooperatives are located in remote areas and serve smallholder farmers. They are often the first responder of finance in rural communities. Thus, in order for Sakchyam to ensure improved access to finance in its programme areas, working with SACCOs is indispensable. Cooperatives also offer a way in which to further develop value-chain financing and MSMEs. Cooperatives also have potential to diversify the financial products such as remittance, micro insurance etc.
Meso-level organizations in microfinance also play an important role in providing/increasing access to finance in Nepal. There are two types of apex or meso-level institutions: 1) networking institutions that do not provide financial services but work as capacity building institutions and 2) wholesale lenders such Rural Microfinance Development Centre (RMDC) and First Microfinance Development Bank (FMDB) which often also provide capacity building support. Sakchyam works with both types.
Among the institutions that Sakchyam works with or through include:
Nepal Rastra Bank (NRB), the central bank of Nepal, established in 1956 under the Nepal Rastra Bank Act 1955 is the monetary, regulatory and supervisory authority of banks and financial institutions. The new Nepal Rastra Nank Act 2002 which replaces the erstwhile act has ensured operational autonomy and independence to the bank. Key objectives of the central bank are to achieve price and balance of payments stability, manage liquidity, ensure financial stability, develop a sound payments system, and promote financial services. The board of directors, chaired by the governor, is the apex body of policy making. The governor also discharges his duty as the chief executive of the bank.
As of December 2016 there are 48 MFDBs serving over 2 million individual clients in Nepal. In addition, there are 25 Financial Intermediary NGOs (FINGOs). These FINGOs have been mandated to transform to MFDBs and are in the process of doing so. In addition, there are 15 NRB-licensed SACCOs that report to the NRB. The rest (more than 31,000 cooperatives including more than 13,000 Savings and Credit Cooperatives) fall under the Department of Cooperatives. Together with the FINGOs, these cooperatives serve over one million clients. With a social mission, microfinance organizations are generally more willing and equipped than commercial banks to go into remote and challenging environments, largely relying upon group-based lending models and focused on serving women, the poor, and other disadvantaged groups (DAGs). By partnering with microfinance institutions, Sakchyam is able to provide one-stop financial products and services (loans, savings, remittance transfers, microinsurance, etc.) to clients that otherwise would be excluded from the formal financial sector.