The joint UNCDF-UNDP project ‘Nepal Rastra Bank-Enhancing Access to Financial Services (NRB-EAFS) project has recently registered and uploaded information of all its partner microfinance institutions on MIX Market.
The major aim of the NRB-EASF project is to strengthen the capacity of microfinance institutions and enable them to reach 300,000 unbanked individuals. The project’s total budget is $3,000,000 funded 50 per cent each by UNDP and UNCDF. The project duration is from July 2008 to December 2012.
In this quarter, EAFS project also completed a rating activity of 10 Strategic Partners. The rating was conducted by M-CRIL - an international rating agency based in India.
EAFS’ strategic partners received positive ratings, the analysis however, highlighted some common issues facing all partnering institutions. All MFIs in Nepal for example, still rely on manual Management Information Systems (MIS) and while computerization is in progress this may take up to three years to come fully into place.
Another common challenge facing the Nepali microfinance industry consists in the similarity among loan, savings and insurance products offered by different MFIs, thus not creating healthy competition for the clients.
Moreover, M-CRIL’s rating found that most clients use only two general loans products, despite the availability of a broader range of products. This suggests that there is generally a lack of awareness among clients about products and services whereby they use only what they know about.
EASF will be incorporating the recommendation made by M-CRIL in future technical assistance interventions of the project.