National Microfinance Vision 2015 in offing

Rural Microfinance Development Centre (RMCD) is organising a Nepal Microfinance Vision -2015 conference to formulate a medium-term vision for the coming five years.
"RMDC has planned a two-day conference to formulate a medium-term vision for 2015 in Kathmandu on October 28-29," said Shankar Man Shrestha, chief executive officer at the Centre addressing the 12th annual general meeting of the Centre here today.
"RMDC has encouraged all the Microfinance Institutions (MFIs) to formulate their individual visions for the next five years," he said, adding that the Centre will consolidate all the visions into one and formulate the National Microfinance Vision-2015 with well-defined strattegies and action plan.
There are around 90 microfinance institutions in operations currently. Out of the them, 86 are associated with the RMDC that provides wholesale credit, institutional strengthening and capacity building supports to MFIs, and training supports to the ultimate borrowers through the concerned MFIs. "Apart from MFIs some 40 specialised co-operatives are also associated with the RMDC," he added.
However, the cost of funds and the lending rate of the banks and financial institutions have gone up creating the supply of fund's constriants to the microfinance sector," said Ashoke Shumshere Rana, chairperson of the Board of Directors (BoD) of RMDC.
Despite all the odds, the authorised capital of the Centre has been raised to Rs 1 billion and the issued as well as paid up capital to Rs 540 million, Rana said, adding that the Centre will floate Rs 156 million worth shares to the general public, including five per cent to its staff, and Rs 44 million to the national or international institutions.
In the fiscal year 2009-10, the Centre has disbursed Rs 1.20 billion loan to varous MFIs, including some development banks. The MFIs have been providing financial services to more than one million poor households in the country.
MFIs have been helpful in creating a just society with women empowerment and economic empowerment.
"Encouraged by the success of MFIs, the government has announced a new mMicrofinance Policy," he said, adding that the central bank has also issued a new directives enabling microfinance institutions to mobilise deposits from the general public.
However, alongwith growth the MFIs have also been encountering some challenges. "But RMDC will work for resolving the problem of over financing caused by multiple financing of the MFIs," he added.
Though MFIs have been developed as an industry in last one decade, it has been observed that there has been some unhealthy competitions among the MFIs recently.
"The cut-throat competitions due to increasing numbers of MFIs lately -- especially in Tarai districts -- has encouraged unhealthy competitions," said Shrestha. "RMDC will look into the cases of overdebt seriously and try to make MFIs more responsible for their sustained growth."
Promoted by Nepal Rastra bank (NRB) -- the central bank -- and commercial banks, RMDC’s primary objective is to provide microfinance access, via microfinance institutions, to rural poor households, especially to women. The clients can then undertake viable farm and off-farm economic activities and improve their quality of life.