CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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COVID-19 and its Impact on Microfinance – an Online Experience Sharing

During the lockdown period, the Centre for Self-help Development (CSD) conducted online interactions with CEOs and Department Heads of its member organizations. A total of six online meetings were held; two with Province 1 and 2 on May 5 and June 15, 2020 (2077 Baisakh 23 and Asadh, 01), two with Province 5, Karnali Province and Sudur-Paschim provinces on May 7 and June 18, 2020 (2077 Baisakh 25 and Asadh 4) and two with Gandaki province and Bagmati Province on June 25 and 26, 2020 (2077 Asadh 11-12).

During the Interaction, all the participants shared their views on the present situation and challenges that occurred due to Corona Pandemic and lockdown and also on the coping strategies of their concerning organizations. According to them, the situation is quite alarming for microfinance institutions. They also reiterated that many challenges are similar to each other but some of the issues are very peculiar and specific to particular organizations.

At the beginning of the pandemic most of the staff did not attend the office in April 2020 (Chaitra 2076) but they started to join their branch after and onward May 2020 (Baishak 2077). In the initial stage of the outbreak of this syndrome, most of the staff faced mental and physical stress on the risk of virus contamination. Though the staffs were physically not present in the office they were in regular touch with their members via telephone and cell phone. Some of the staff also got local authorities pressures when they return to their office from their home and they forced to stay in quarantine for one to two weeks. Besides the social pressure staffs also faced family pressure on the dissemination of the virus to family. They worked rigorously with their valuable members for the safety and health awareness on the corona pandemic even under such social and family pressure. MFIs had also emphasized the staff's health safety and to boost up their morale some incentives like corona insurance, mask, sanitizer etc provided to their employees.

Similarly, most of the MFIs could not conduct all their activities and services as before. At the early stage of the pandemic majority of the centre meetings remain closed. Branches were unable to conduct centre meetings and provide door-to-door service. Simultaneously, MFIs are also facing problems on installment collection as well as on additional loan disbursement because of lack of business. During the pandemic and lockdown, most of the MFIs focused on awareness campaign and on relief activities to cope with the situation. In due time, MFIs had also contributed a chunk amount of funds in governments’ Corona Relief Fund.

During the pandemic, many of the members lost their businesses or their businesses remains stagnant. Only few members can run their businesses. This resulted in no repayment of installments. Due to lockdown, members are also facing problem of marketing of their products and if they could have a market they could not get a reasonable price of their products. The members of urban areas were more affected in comparison to members of rural areas. Some of the MFIs worked on creating a supply chain for their clients' businesses and products. Simultaneously some of the MFIs had offered incentives on interest without giving any pressure to the members for repayments.

The executive level interactions were participated by the Chairpersons, Vice-Chairpersons, CEOs, General Managers, Deputy CEOS, and Department Heads of CSD member's organizations of all provinces. The meetings aimed at creating an experience sharing and learning platform on the effects and opportunities created by the Corona Virus pandemic (COVID-19) and the subsequent lockdown. The participants of each interaction program consented on following way forward to overcome the consequent effect and challenges of the pandemic on MFIs and its members. Each interaction program concluded with the participants agreeing to implement, formulate and review their existing action plans, policies and procedures to address the unprecedented situation.

The participants were represented from the Solve Nepal Laghubitta Bittiya Sanstha Limited, the  Navodaya Saving and Credit Cooperative Limited, the Jeevan Bikash Laghubitta Bittiya Sanstha Limited, the Nerude Laghubitta Bittiya Sanstha Limited, the Mahuli Laghubitta Bittiya Sanstha Limited, the Srijanshil Laghubitta Bittiya Sanstha Limited, the Grameen Swayam Sewak Laghubitta Bittiya Sanstha Limited, the Forward Community Laghubitta Bittiya Sanstha Limited, and the Sahara Nepal Saving and Credit Co-operative from Province 1 and province 2. Similarly, the participants of the meeting from province 5, Karnali and Sudur-Paschim province were the Shree Udayadev Multipurpose Co-operative Limited, the Navajivan Co-operative Limited, the Kishan Multipurpose Co-operative Limited, the Upakar Laghubitta Bittiya Sanstha Limited, the Bauddha Gramin Multipurpose Co-operative Limited, the Batabaran Sudhar Multipurpose Co-operative Limited, the Pioneer Multipurpose Co-operative Limited, the Unique Nepal Laghubitta Bittiya Sansatha Limited, the Mahila Samudayek Laghubitta Bittiya Sansatha Limited, the Aatma Nirvar Laghubitta Bittiya Sansatha Limited. Similarly, the representation in the meeting held with Bagmati and Gandaki province were from the Chhimek Laghubitta Bittiya Sanstha Ltd, the Manushi Laghubitta Bittiya Sanstha Ltd, the Swabalamban Laghubitta Bittiya Sanstha Ltd, the Jalpa Laghubitta Bittiya Sanstha Ltd, the Mahila Sahayatra Laghubitta Bittiya Sanstha Ltd, the Mahila Laghubitta Bittiya Sanstha Ltd, the Mirmire Laghubitta Bittiya Sanstha Ltd, the National Microfinance Bittiya Sanstha Ltd, the Womi Laghubitta Bittiya Sanstha Ltd, the CYC Nepal Laghubitta Bittiya Sanstha Ltd, the Mahila Sahayogi  Saving and Credit Cooperative Ltd, the Navaprativa Saving and Credit Cooperative Ltd and the Aarthik Bikash Saving and Credit Co-operative Ltd.
The interaction program was moderated by the Chairman of CSD Mr. Shankar Man Shrestha where Executive Chief Mr. Bechan Giri, Director Mr. Satish Kumar Shrestha, Training Officer Ms. Renu Prajapati and Media and Communication Officer Mr. Chandra Kant Pandit from CSD were also present. Way Forward Set by Participants.

Way Forward

1. The management team and senior staff shall review the impact of the Novel Corona Virus (COVID -19) pandemic and the lockdown       on the microfinance program and discuss on future strategies.
2. Every branch shall collect the data and prepare a profile about the loss and damage of the members' enterprise as a result of the          pandemic and lockdown.
3. Each branch shall classify its members into the following groups:
A. Members who paid both principal and interest during the lockdown.
B. Members who only paid interest during the lockdown.
C. Members who are willing to pay but are unable to pay installment due to the loss of business.
D. Members who misused loans and were involved in multiple borrowing and do not respond to the organizations follow up.
4. Rescheduling of loan installments of A, B and C class members up to a period of six months analyzing their businesses and as per their needs and capacity to repay.
5. Stop further loan disbursement to default members but focus on collection of the overdue loans gradually through persuasion. 
6. Establish regular communication with the members to maintain relations and to boost their morale up.
7. After the pandemic, all MFIs should provide re-orientation to their staffs on the necessary value and fundamentals of microfinance and to run the office effectively and efficiently.
8. CEOs and other senior staffs from Head Office shall visit all branches and selected centres adopting safety measures to encourage staff and keep their confidence level high.
9. MFIs should disburse loans at only minimum level to the tune of the need and capacity of the members for the time being and not go for aggressive disbursement.
10. The pandemic had given time to reflect on the mistakes made previously. The MFIs  officials realize mistakes made in the past and should make and ensure not to repeat them in the coming days. 
11. After the end of the lockdown CEOs and senior officers will visit field offices to understand the ground reality and ensure the safety of the staff while conducting centre meetings and member visits.
12. MFIs should conduct a survey of returnee migrant youths and prepare an individual profile including name, skill, education level, investment capacity and the businesses of interests to engage them in enterprise creation.
13. Devise a proper working plan within June 15, 2020 (Asadh 2077) so that the MFIs can operate its services in the corona time.
14. As market assurance is necessary condition to sell the products of the members and motivate them to establish enterprises to improve their livelihood. MFIs will work towards establishing their own sister organization that will support in marketing their members’ products.  
15. Collect information on the member's children who have completed high school and above level and interact and motivate them to become a new generation of entrepreneurs.
16. Provide interest rebate according to NRB directives.
17. Next Virtual Meeting will be held within a month i.e. on Shrawan 2077.

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