CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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It is high Time for MFIs to Move Ahead with the Digital Services to their Members.

The leaders in the field of microfinance are of the view that a time has come for all microfinance institutions to digitize microfinance services to provide easy access to the deprived and marginalized community. They urged that the use of digital technology can bring a lot of returns, more achievements with less time, less cost, and less effort. This is the conclusion of the speakers of the webinar on Digitalization in Microfinance: Opportunities and Challenges organized by the Center for Self-help Development under the 10th Webinar Talk Series held on 4th July, 2021.

Addressing the webinar, Mr. Shankar Man Shrestha, Chairman of the Center for Self-help Development (CSD), said that the microfinance sector could not stay away from the digital world in the current scenario. However, he opined that the use of digital technology should also be pro-poor and the use of technology should not harm the essence and purpose of microfinance. "We are in the age of technology. Technology has revolutionized in every walk of life. Now it is also a time for microfinance to change and make its services better. However, we must be cautious. It should be used in right manner. Along with technology MFIs should ensure quality of microfinance and taking services to the doorstep of the poorest. It should not be the end but tool to raise efficiency and quality of operation.”

Mr. Shrestha also mentioned that microfinance is a system that is intertwined with human relations, and it is essential to focus on how digitalization maintains the foundations and strengths of physically interconnected relationship between member and staff.

In their presentations, the speakers argued that digital microfinance services are indispensable in the present context of changing needs and expectations of people. There are both opportunities and challenges. It is also important to be aware of the risks posed by digitalization.

Speaking on the occasion, Mr. Dambar Bahadur Shah, General Manager of the Kisan Multipurpose Cooperative Ltd, said that the use of digital technology in microfinance services has made it easier for the employees to work and for the members to get services in prompt manner. Earlier, Mr. Shah informed that the Kisan Multipurpose Cooperative Limited has used digital facilities and technologies such as tablet banking, mobile miscall service, QR code service, e-service, and about 57,000 microfinance members have received daily payment services and all banking facilities. He also informed that the use of digital technology has made it possible for the business of each branch to be available within 7 seconds and also helped smooth operation of administrative work and manpower management in the organization.

Another speaker at the Webinar, Mr. Govinda Bahadur Raut, Assistant Chief Executive Officer of Muktinath Development Bank, said that the use of digital technology has made the service faster, more effective, less expensive, and more transparent. He also mentioned that digital services would be effective also in curbing fraud and illegularities in financial transactions at various levels of microfinance operations. He said that it has eased understanding the status of each activity and conduct loan analysis of microfinance members. Mr. Raut also informed that more than half of the 140,000 microfinance members of Muktinath Development Bank are using mobile banking services as well.

In his presentation, Mr. Sanjay Kumar Mandal, Chief Executive Officer of Jeevan BikasLaghubitta Bittiya Sanstha Ltd. Morang said ?The use of digital technology is essential for the smooth and effective delivery of microfinance services to the target group. At present, Jeevan Bikas has provided services to its members through its app including cash transactions, bill payment services, and important information, and 72,000 members have benefited from this service”. He further added? The Jeevan Bikas has also created a digital member in each of the villages where digital transaction service is not available to the member. The Digital member conducts transactions on their behalf and Rs. 1 billion has been transacted online so far. This way we have also been providing through online service such as as e-sewa, khalti, knowledge of the entire area of work through GPS technology and about 1,000 centers have been able to conduct cashless transactions.”

He added digitization has also eased manpower management and mobilization, staff record keeping and other information collection and updating. He said that where there is no internet service and members do not have smart phone and no idea to operate mobile, the digital members provided services in center meeting operations.

The speakers said that there is a great challenge to educate members and take them into confidence in the use of digital technology. They opined that the digital technology needs to be microfinance member-friendly, and MFIs should provide financial literacy, as well as technical literacy to the staff and members.

Mr. Satish Shrestha, the moderator of the webinar and director of CSD, said that the use of digital technology by microfinance institutions should not only be seen as an opportunity to cater services during the corona epidemic and lockdown but also be seen as a mechanism to improve the flow of microfinance services and increase the efficiency and productivity of work.

The webinar was attended by 157 officials and staffs from banks and the financial sectors.

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