Technically empowered BFIs ensure improved access to financial services

24th October 2018

The UNNATI Access to Finance partner Bank and Financial Institutions (BFIs) shared their knowledge and lessons learned while implementing new financial products and developing and implementing long term agriculture lending during an event held here on October 24, 2018.


The knowledge sharing conference on ‘Technical assistance (TA) to UNNATI Access to Finance (A2F) partner BFIs’ was jointly organized by ACCESS Advisory and UNNATI Access to Finance. ACCESS Advisory on behalf of UNCDF delivered tailor made technical assistance to 14 BFIs based on the need assessment carried out in 2017. This entailed developing new financial products and revising strategies for implementation among others.


Five BFIs - Chhimek Lagubitta Bikas Bank, Laxmi Bank, NMB Micro Finance Bittiya Sanstha, Nerude Laghu Bitta Bikas Bank and Forward Micro Finance Institute presented success cases, shared their knowledge on technical assistance received on different products and lessons learned during the conference.


Executive Director of Nepal Rastra Bank (NRB) Mr. Janak Bahadur Adhikari who also serves as the National Project Director (NPD) of UNNATI Access to Finance project, said that in order to increase financial access of rural people the NRB has been working rigorously on financial inclusion sector since two decades and have made policy level reforms. Financial inclusion means providing access to those who have not been using financial services and to make them ready to use those financial services through the outreach programs on financial literacy.


The NRB has introduced funding mechanism system so that the financial service providers will not face any fund crunch during the implementation of the products. “We are very careful to check misuse of fund by introducing priority sector lending and have included a mandatory provision of providing financial literacy,” said  Mr. Adhikari.


The BFIs shared their knowledge on how the technical assistance on managing maturities helped them develop funds-inflow outflow management (FIOM) strategy using FIOM tool. Similarly, the technical assistance in upgrading of agricultural loans and new product design, development of strategic plan for agri-lending too helped them manage the risks in the agriculture sector.


The BFIs shared that through technical assistance, they learned that historical trends and data should be reviewed periodically to determine net flow of funds, forecasting of fund requirements should be conducted regularly, a structured, methodical approach to product development produces viable financial products and more clarity in operations etc. They also learned that purposive savings designed accordingly to the needs of clients can increase savings volume.


Mr. Adhikari also informed that the NRB has planned to establish ‘A class’ commercial banks in each of the 753 local governments. As for now, there are around 26.5 million depositors across the country in all 151 Bank and Financial Institutions and they have been receiving various services from their 6,999 branches.


Mr. Adhikari stressed the need to increase awareness of farmers about the use of financial services to increase their business in a sustainable way. “This has increased economic development of the country,” he said, “If we increase formal financial sectors then informal financial sectors will be decreased which will be beneficial.” He further said that the UNNATI A2F project has also played an important role in economic development of the country.


National Program Coordinator at the UNCDF Mr. Saroj Nepal said that despite many obstacles like earthquake, informal economic blockade and political transition during the project cycle, the UNNATI A2F has been successful in improving the financial access through various financial products in its targeted seven EDR districts. The UNNATI A2F is supporting farmers who were involved in four agriculture products - ginger, cardamom, dairy products and orthodox tea - in seven districts in the eastern region.


Mr DB Basnet, Project Executive Board member and chair of Nepal Federation of Savings and Credit Cooperative Unions (NEFSCUN) mentioned that the works of UNNATI is just beginning to yield fruitful result and that it would be good to give continuity to this kind of support by other donors for a few more years.

 Mr. Ron Bevacqua Managing Director of ACCESS Advisory presented the tools used in providing technical assistance to the BFIs. The event was attended by all BFI partners as well as NRB and the Project Executive Board members of UNNATI ACCESS TO finance.