September 18, 2015

Financial Capability is one of three major components of the Sakchyam Access to Finance Programme. We believe that in order to improve access to finance to remote and difficult areas, we must work on both the demand and the supply side of access to finance. Just expanding financial services (supply side) in rural areas does not guarantee that it reaches all people (demand side). Many people, especially in poor and rural areas, aren’t aware of the available financial products and services offered and/or the offerings may not meet their needs. Moreover, we’ve found that even those currently banked may not clearly understand the offerings or how best to use the financial offerings. Additionally, traditional training methods may not be effective at reaching significant number of poor and disadvantaged groups (DAGs).

Our objective is to make people financially capable so they can make informed decisions on obtaining financial services from formal institutions including banks, MFIs and cooperatives. In order to make people financially capable, they need financial education. The Programme is introducing appropriate financial education across all interventions.

Our support is focused on the following areas:

  • Revision of content/methodology: Many MFIs are using traditional classroom-based lectures to educate clients on different aspects of financial literacy. The content and delivery are not engaging, and as a result, don’t resonate with many clients. To overcome this we are:
    • Working with our partners to update and/or create curricula and additional resourcesto better cover important concepts like savings, loans, house hold/enterprise budgeting, remittances, micro enterprise and micro insurance along with skills and business or entrepreneurship training.
    • Incorporating financial literacy messagesinto monthly group meetings and pre group training (PGT) which is the first platform for clients to become formal member of MFIs and more so that clients get continual education.
  • Alternative delivery channels: In order to better accommodate rural clients’ needs we realize that we must adopt innovative delivery mechanisms. With our partners, we are:
    • Introducing mobile-based financial literacyknown as Interactive Voice Response (IVR) to partners’ clients. This initiative is first of its kind in Nepal and gaining momentum among all micro finance industry. To date, we have worked with eight different partners, reaching roughly 20,000 clients.
    • Introducing tablets(tabs) for Pre-Group Trainings (PGTs) and centre meetings not only to increase staff’s efficiency but to also offer audio and visual tools to teach financial concepts.
    • Introducing short video filmson six themes of financial education (Saving, Credit, Insurance, Remittance, Family budgeting & Micro Enterprise) which is broadcasted in center meeting of MFIS using either a tablet or projector.
    • Creating “jingles” or short advertisements that are being broadcasted on radio and television to also communicate important financial concepts and product offerings to potential clients.
    • Sakchyam partners have also started “Financial literacy on Wheel” in eastern part of the country where one of our partner Sahara SACCOS has partnered with local Bus Association to demonstrate our financial literacy videos throughout the day in 15 buses plying in Jhapa, Sunsari & Morang district. Created leaflet, brochure and other paper based promotional materials for new & perspective clients of banks/financial institutions.
  • Client protection: In order to ensure clients’ are put first and being treated fairly, we are working with partners to:
    • Establish grievance redressal mechanismswhereby clients can formally file and mediate any concerns. Having this mechanism in place better protects clients and reduces organizational risk.
    • Have partners undertake and receive SMART Certification for the first time in Nepal. Sakchyam collaborated with Accion International to provide training on the Client Protection Principles to Sakchyam Partners. They are now able to self- assess the situation and what improvements are needed for receiving the Smart Certification. This process is expected to help MFIs keep clients in the centre of microfinance services.  Learn more here.
  • Other Sakchyam initiatives including product design, fair pricing, and transparencyand credit bureau registration are also aiding with client protection across the industry.