UKaid Sakchyam Access to Finance Programme (Sakchyam) is committed to connecting rural poor, disadvantaged groups (DAGs), and women to formal financial products and services in order to provide 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 also critical. When it comes to informal entrepreneurs in Nepal’s remote Himalayan districts, unless a concerted effort is done to meet their financial service needs, their choice is limited to informal financial sources. Sakchyam believes a paradigm shift is needed in the microfinance sector to strengthen the capacity of microfinance institutions (MFIs) so that they are able to achieve organizational efficiency and expand their outreach in a sustainable manner.
Financial products and services are often designed to cater to urban and semi-urban populations. People of ‘topographically-difficult’ districts, mostly in Karnali and Province 5 & 7, are either forced to make use of whatever options there are available, or depend on informal sources, mainly money lenders to take care of financial needs. Tailored and adopted financial products and services for rural poor are almost unheard of and the adoption of modern technology, rampant in urban areas, to benefit these rural poor communities, which is an excellent, cost-effective and practical way of providing guidance and training on financial behaviour, is an approach that is yet to see efficient implementation. Capacity enhancement for capable entrepreneurial minds, specially residing in remote hills and mountainous area, a potentially sustainable investment toward promoting economic self-sufficiency is largely absent and financial institutions often do not keep in mind profiles of customers when providing services to them.
With Sakchyam’s support, Nirdhan Utthan Laghubitta Bittiya Sanstha (Nirdhan) aimed to expand access to finance in remote locations of Darchula, Mugu, Humla, Bajhang and Accham districts by establishing 5 new branches. They also adopted technology such as Point of Sale (POS) machines to improve efficiency and transparency while offering financial services by their loan officers in several districts including the 5 new branches. Nirdhan provided financial education and entrepreneurship training prior to giving out loans to ensure productive use of loans to improve household economy.
As of June 2018, Nirdhan has,