CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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Let's Understand The Crisis and Find A Solution

Chairman of the Centre for Self-help Development Mr. Shankar Man Shrestha has suggested the microfinance staff to face the Corona epidemic and lockdown crisis while maintaining the essence of microfinance. Mr. Shrestha expressed this at a Webinar discussion program organized by CSD onShrawan 7, 2077 (July 22, 2020) with the chairman, CEO, department heads and 10 branch managers of Nerude Laghubitta Bittiya Sanstha Ltd. The online discussion was organized with the objectives of determining the future course of action by moving towards the problems solvency and learning in the microfinance sector due to the corona virus epidemic and lockdown.

On the occasion, Mr. Shankar Man Shrestha also suggested to prepare a detailed description of the impact of this pandemic on the branches and members. Before formulating a strategy, it is suggested to categorize its members through each branch and find ways to make them self-reliant and self-employed by collecting details of youths returning to the villages from abroad and cities. He further suggested that now the lockdown has been removed, the central meeting should be started by adopting security measures, vigilance should be exercised to increase the confidence of the members, pressure should not be put on the members who are unable to repay the loan due to adverse business impact.

During the discussion, Nerude Laghubitta Bittiya Sanstha Ltd. Chairman Dr. Bhesh Prasad Dhamala, a Board of Director Mr. Mani Kumar Arjyal, Managing Director Mr. Sudhir Kumar Shrestha and department heads were also present.During experience sharing, Dr. Dhamala said that the microfinance sector, which has contributed a lot in poverty alleviation, has been neglected recently. For this, he brought out the perception that the microfinance institutions need to showcase their achievements to the general public. He pointed out that unhealthy competition in the sector has increased due to the large number of microfinance institutions. "Now microfinance should focus on service expansion by reducing the number to protect its creditworthiness," said DrDhamla.On the occasion, it was emphasized by the management team that the future strategy of the organization should be to provide services to as many members as possible with less resources. For this, the branch managers were of the view that the organization would be strengthened and freed from the crisis only if the technology-friendly and effective services were expanded and they worked frugally. At the same time, the speakers complained that the monetary policy has created problems for the microfinance sector by setting a 15 percent interest rate cap.

In the discussion, all the 10 branch managers gave a presentation on the challenges faced during the lockdown period, the challenges faced by the member, staff level, administrative and financial condition of the branches. During the presentation, the branch managers shared that 90 percent interest was collected from the members, 50 percent installment was also recovered, no additional loan disbursement was made and the delinquent loan also increased.

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