Kathmandu, Dec. 14
Expert of microfinance business in Nepal have said
that the sector was witnessing increment in fraud cases.
Speaking at Symposium on Fraud Control and
Management organised by Centre for Self-help Development (CSD) on Saturday,
they pointed towards the lack or poor status of monitoring and supervision to
address the frauds.
Shankar Man Shrestha, the Chairman of the CSD, said
that fraud has increased in microfinance institutions due to weak monitoring and
internal control. He added, “Fraud was unheard in microfinance till a couple of
years back but has risen to an epidemic level in recent years. MFIs leader
should be vigilant and make regular interaction with the client and field
staff.”
The Chief Executive Officers of various microfinance
companies present at the symposium outlined that monitoring and supervision was
a key towards eradicating fraud.
They said that the CEO’s should have the KYC (know
your client) of both clients and staff and be aware of the lifestyle of their
staff to prevent the fraud in microfinance.
Shyam Khatri presented legal remedies to tackle the
problems endemic in microfinance sector. He mentioned that the bank and
financial institutions could formulate bylaws themselves in conjunction with
relevant acts of the government to tackle banking fraud in their particular
organization and such bylaws will have legal repercussions.
Discussion was also carried out on concept of
internal control and good practices seen in different organizations. There was
consensus among the staff that the MFI’s should enact preventive measures such
as right and well-motivated human resources and devising strong audit control
practice in the organization.
Published in The Rising Nepal daily on 15 December 2019.
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