Mahila Samudayik Microfinance Financial Institution – Project 2

PROMOTING ACCESS TO FINANCE THROUGH EDS AND TABLET BANKING SERVICES

Background

Number of Microfinance Institutions (MFIs) have sprouted in recent years in Nepal. This increase in number has helped increase the financial access while there are instances of multiple borrowing and over-indebtedness as well. Number of additional players in MFI sector haven’t increased the innovation and diverse ranges of financial and non-financial services tailored to need of clients.

Challenges

With the increased competition in MFI industry, they have been struggling to find client with adequate skills to start/run a business and as a result it has been difficult to maintain the utilisation of loan. MFIs now need to focus in providing/linking skill training to their clients in addition to currently offered financial services. Due to inadequate skills, loan offered by MFIs are either spent in unproductive activities or the use of loan has not generate optimum revenue which a skilled entrepreneur could earn. This has alerted MFIs to provide or link with skill training with the loan availed by their clients. Moreover, clients are also struggling to find proper market to sell their produce which discourages to start/up-scale businesses.

Sakchyam’s Interventions

UKaid Sakchyam Access to Finance Programme has supported Mahila Samudayik Microfinance Financial (MSMF) Institution, previously Nepal Women Community Service Centre (NWCSC), to expand Enterprise Development Service (EDS) in its branches located in Dang, Rolpa, Rukum, Salyan and Pyuthan. Through this partnership, NWCSC will also introduce Tablets to digitize its operation and link with the EDS operation. MSMF will also be working with other agencies to create market linkages. To align their EDS beneficiaries with improved financial services, relevant financial literacy campaigns will also be organized. MSMF will take technical support from Berendina Microfinance, which has pioneered EDS activity to MFI clients in Sri Lanka.

Likely Impact

Sakchyam’s support to MSMF in its various initiatives should see improved skills of new and existing entrepreneurs along with financial services to start and up-scale their business. MSMF’s understanding of the needs of beneficiaries in the region coupled with the EDS and Tablet services will help boost economic activity and help launch multiple small enterprises as a result of the financial literacy and skill training. Through this project, MSMF will offer micro-enterprise loan along with other auxiliary support to 6,000 beneficiaries. MSMF has also committed to provide skill training to some 3,300 beneficiaries. In addition, MSMF will launch tablet banking in all 22 branches. Use of tablet is also expected to help track the production of EDS clients.

As of December 2018, MSMF has,

  • Completed Grantee Induction Workshop
  • Hired key human resources
  • Launched EDS coupon in additional three districts
  • Placed an order to purchase 40 tablets whereby they are using 30 tablets in 6 of the branches
  • Issued 6,034 coupons and conducted 287 training (with more than 3800 participants ) as a part of EDS activities