Connecting rural poor, disadvantage groups (DAGs) and women to formal financial services for enabling them with choices to save, borrow, invest and earn is one of the core objectives of UKaid Sakchyam Access to Finance Programme (Sakchyam). While enhancing access to finance for people living in the remote and inaccessible regions is the immediate goal of Sakchyam, efficiency and sustainability of financial service delivery to these people are matters of long term concern. Therefore, Sakchyam conceives that there should be a paradigm shift in the service delivery channels of microfinance sector. This sector should resort to advanced technology to achieve organisational efficiency and expand its outreach in self-sustainable manner.
Microfinance service is considered expensive due to its high operation cost (service delivery at the door step of clients with manual operation). This sector is deprived of sophisticated Management Information System (MIS) until now, let alone other technological innovations that would bring down the cost of catering service to remote areas with poor road network and other infrastructure. They resort to traditional style of doing almost everything manually. Resistance to change is a common phenomenon among microfinance actors. Instead of taking lead at experimenting something new, they rather choose the comfortable path of following what has already been tried and tested. In the given scenario, institution opting for technology and adopting alternative delivery channel for service delivery is rare. However, given the diverse socio-economic and geographical context of Nepal, adoption of innovative solutions backed by technology is irrefutable for providing easy, convenient, quick and accessible financial services to people living in every nook and corner.
Kisan Micro Finance Bittiya Sanstha Ltd. (KMF) is a ‘D’ class national level financial institution that was established in 2012. It is licensed by Nepal Rastra Bank and Sakchyam partnered with them to adopt mobile technology in its core banking system to extend its services to remote regions of mid- and far- western regions (Dailekh, Dadeldhura, Kalikot, Salyan, Jumla, Jajarkot, Accham, Kailali, Doti, Darchula, Baitadi and Bajhang districts) of Nepal. Online MIS, Tablet Banking as part of the core banking system and Mobile Banking were the innovative interventions proposed by KMF under “Sakchyam Kisan Rural Microfinance” (SKRM) project. These interventions have brought transformational change in traditional way of carrying out microfinance services. In addition to that, the project has also ensured access to remittance services, insurance products and financial literacy program that has led to self-employment opportunities and improved livelihood of the deprived people.
Impact: By the end of the project in June 2018, under the SKRM Project, Kisan Microfinance has,