“Most of the microfinance stakeholders are women between 30-36 years. There will be a crisis of sustainability if we failed to encourage second generation in to microfinance campaign,” said Shankar Man Shrestha, CEO of Rural Microfinance Development Centre (RMDC). [break]
Presenting a report on the state of microfinance in Nepal, Shrestha said building cooperation and coordination among microfinance institutions (MFIs), sensitizing MFIs on risk management by reducing client overlapping and over financing, taking microfinance services to the lower strata of society and financing unemployed youths in rural areas are some of the things that we should do for the success of the microfinance sector.
“It is necessary to launch programs using microfinance sector to retain unemployed youths in the remote hilly and mountain districts by increasing their access to finance service in a bid to check the exodus of productive youths to overseas job market,” said Shrestha. He also underlined the need to strengthen institutional capacity, conduct research on key issues as well as strengthening monitoring, supervision and follow up of MFIs for their successful growth in the coming days.
Share of Nepal in the SAARC region in terms of MFI members is just one percent, according to a book ´Microfinance in SAARC Countries´ that was launched during the inauguration of the two-day conference Tuesday. India enjoys the largest share of 56.3 percent followed Bangladesh with 37.3 percent.
Outreach report of 2008 shows that the total number of members in MFIs reached 1.05 million in Nepal. About 100 MFIs have made a cumulative investment of Rs 54 billion in Nepal.
Gradual deviation from mission for more profit, supervision and effective implementation of regulations, scarcity of fund and increasing operational cost and reaching to far-flung areas are the major challenges faced by MFIs in Nepal, according to Shrestha.
Speaking on the occasion, Maha Prasad Adhikari, executive director of Nepal Rastra Bank, said the central bank would encourage private sector toward microfinance in a bid to increase the access of youths in rural areas to finance and end the outflow youths for foreign employment.
Sumitra Manadhar, microfinance expert, said politicization and unionization were emerging as a serious challenge in the growth of MFIs.
The two-day SAARC level conference concluded Wednesday.
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