INCLUSIVE MICROFINACE THROUGH DIGITIZATION OF BUSINESS PROCESSES
UKaid Sakchyam Access to Finance Programme (Sakchyam) is committed to connecting the rural poor, disadvantaged groups (DAGs), and women to formal financial service provider in order to enable them with choices to save, borrow, invest, and earn. While enhancing access to finance for people living in remote and inaccessible regions is an urgent need, efficiency and sustainability of doing so are critical. Sakchyam believes a paradigm shift is needed in the microfinance sector with the adoption of new technology, helping it achieve organisational efficiency and expand its outreach in a more self-sustainable manner.
Currently, microfinance in Nepal is considered expensive due to high operation and monitoring costs. The sector lacks a sophisticated management information system (MIS), let alone other technological innovations that can reduce the costs of taking financial services to remote, hard-to-access areas. Traditional business practices by microfinance institutions (MFIs), has contributed to high cost of operation and inefficient services to its clients. Illustratively, all loan and savings transactions are conducted manually at the centre meeting. This leaves little to no time for business expansion and client education. Additionally, loan officers have to spend significant time traveling back and forth to a branch or home office and entering the data manually at the branch. This decreases productivity and has made operation inefficient resulting into losing comparative market.
Chhimek Laghubitta Bittiya Sanstha Ltd. (Chhimek) is at the forefront of using mobile-based technology with its core banking system (CBS) to extend its services to all over Nepal. After successful implementation of first project “Digital Mahila – Digital Women Channel Partners for Gender Inclusive Microfinance Services” with Sakchyam; Chhimek plans to scale up digitization of business process for its entire business under this second project – “Inclusive Microfinance Through Digitization of Business Process” in partnership with Sakchyam. Chhimek will expand its business network by the use of technology – by mobilising Digital Mahilas and through the establishment of Point of Sales (PoS) Services.
Likely Impact: The project aims to;
- Reach 400,000 clients along with 48,661 new clients (100% women)
- Unlock total loan of NPR 1 billion and mobilize NPR 471 million in deposits
- Reach 112,000 clients through digital financial literacy campaigns
As of December 2018, Chhimek has
- Conducted 378 events (16,821 participants) on financial counselling to all guardians, members ,youths and adults.
- Provided training on Capacity Enhancement to 398 staff and assistant members.
- Procured and delivered 132 mini projectors to all branches.
- Completed the assessment for the IT infrastructure requirement