Addressing the inauguration
ceremony of the fourth Microfinance Summit in the capital on Wednesday, Deputy
Prime Minister and Minister for Finance Krishna Bahadur Mahara said that the
microfinance institutions (MFIs) were abandoning the norms of the industry and
urged them not to deviate from their responsibility towards the poor populace.
“The major thrust of the
microfinance should be strengthening and enhancing the rural economy.
Therefore, MFIs should also work to uplift the rural poor and creating a
financial balance in the society,” he said.
According to DPM Mahara,
microfinance banks are different from the commercial banks as the former should
reach out to the households of the deprived people and work for the financial
inclusion.
Governor of the central bank Dr.
Chiranjibi Nepal
rebuked the MFIs for being profit-seeking and city-centric.
“The people in the rural areas
are complaining to the central bank that the microfinance banks are exploiting
the poor instead of supporting them in entrepreneurship and financial access.
And, you are more concerned about the ups and downs of the share prices of your
companies than the plight of the people,” said the governor.
He urged the microfinance bankers
not to dream of being multi-millionaire through their business.
“Your duty is to support the
poor for their livelihood and economic activities. Profit should not be your
priority. If you want to make money in an easier and faster way, go for other
businesses,” said Dr. Nepal .
The governor informed that the
Financial Intermediaries Non-Government Organizations (FINGOs) were allowed to
be converted into the microfinance banks and they should issue shares to the
public within one-and-a-half year from now.
The central bank has opened MFIs
licenses for the banks ready to operate in the nine remote districts in the mid
and far-west.
However, he appreciated the MFIs
for their role in increasing financial literacy, promoting micro-enterprises
and enhancing access of the poor to finance.
President of the Nepal Bankers’
Association (NBA) Anil Keshari Shah urged the microfinance banks to expand
their business.
“Once all the commercial banks
increase their paid up capital to Rs. 8 billion, there won’t be liquidity
crisis and you will have more money to invest to the poor,” he said.
The ‘A’ class commercial banks
must lend 2 per cent of their total lending to the deprived sector.
He also urged for stronger
collaboration and coordination among the banks and MFIs.
President of the Nepal
Microfinance Association Ram Chandra Joshi said that Nepal was one of the leaders in the
South Asian region in terms of the development of microfinance.
He urged the MFIs not to promote
multiple lending.
Coordinator of the summit
Pitambar Prasad Acharya said that the MFIs had been providing services to about
2.4 million deprived population and 90 per cent of them were females.
Around 52 MFIs are providing
their services in 75 districts.
Chief executive officer of the
Centre for Microfinance (CMF), organizer of the summit, Harihar Acharya said
that the MFIs should campaign for the alleviation of poverty and every company
should focus in it.
More than 800 participants,
including policy makers, customers, national and international partners,
bankers, MFIs, FINGOs, cooperatives, are attending the three-day conference.
About 28 working papers will be
presented in the summit. The theme of the papers include assessment of the
microfinance sector, use of technology, diversity in services, value chain,
financial literacy, poverty alleviation, institutional development and
challenges.
Approximately 21.6 per cent
people in the country have access to finance through MFIs.
As much as 1.3 million borrowers
have access to finance through 366,574 groups across the country.
Likewise, FINGOs have 660,000
clients in 54 districts.
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