20th Feb 2021, Kathmandu
The financial sector and the economy are slowly returning to normal after the Covid-19 crisis. Despite the effects of covid infection, the microfinance field has also stepped forward. The importance of the microfinance market, the backbone of the rural economy, has increased. After Covid-19, the number of people engaged in agriculture and entrepreneurship has increased further.
In this context, Prem Bahadur Pathak said a long-standing active microfinance activist and Chief Executive Officer of Unnati Sahakarya Microfinance, three questions.
What is the state of the rural economy and the microfinance sector after Covid-19?
People’s self-confidence is gradually increasing as a result of the vaccine provided by the Government of Nepal after Covid-19. There was a kind of psychological fear among the businessmen because of the fear of Covid. In such a situation, there would be no work, no business, no food in the future. But the vaccine against covid has also arrived in recent times, so things have started to go smoothly. Work has begun to pay the installment of microfinance.
The kind of terror that was going on in society has now gradually disappeared. In the current situation, we have found that the stalled business is gradually resuming with the thought and confidence that the stalled business needs to move forward.
What do you think should be done nowadays for the upliftment and expansion of microfinance?
In the current pandemic situation, tax breaks by regulatory bodies for the development and expansion of microfinance could have been effective. Given the low interest in resources that we now have in the banking and financial sectors, it would be appropriate for the central bank to use its resources on the basis of the public’s credibility and our capital to resolve them in the long run.
Similarly, microfinance is now in a state of merger and acquisition for the expansion of microfinance. Rather than opening and expanding new institutions as before, the scope of the work and transactions of existing institutions should be extended. At present, NRB is about to grant concessional loans. Concessional loans are also considered appropriate to serve our clients on the basis of discounts offered by the Central Bank.
Now it is in the process of becoming a procedure from NRB and after that, we will provide this service to the customers. That will also send a good message to the business community. In microfinance too, there is a need to introduce new technologies towards digitalization, to improve product services over time, and to satisfy the needs of customer members, the general public, the government, and the concerned bodies.
The role of microfinance is considered important in expanding financial literacy and banking access, what kind of programs are needed to empower it?
First of all, mass media plays an important role in enhancing financial literacy and banking access. The programs we have done in the past days have been effective. We are hopeful that our financial literacy campaign will be effective. If organizations like Media International and organizations that serve the uneducated and the poor in rural areas can bring more effective programs in the financial sector these days.