Microsavings, Microcredit and Microinsurance: Financial Products of Small Farmer Co-operatives Ltd. in Nepal

Publication Date: Jan 2001
Published by: AEF University of Cologne
Document Type: Paper

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What is the effect of applying technology on microfinance service delivery?

The paper states that the financial technology employed by any microfinance institution in order to deliver services to its clients is probably the most important factor influencing profitability. It argues that without appropriate loan, savings and insurance products, and the capability to regularly produce innovations, outreach to the poor and ultimately sustainability of microfinance institutions cannot be achieved. Using data gathered through semi-structured interviews conducted with the Institutional Managers and, in some cases, Chairpersons of different tiers of Small Farmer Co-operatives Ltd. (SFCLs) (Main Committee, Inter-Group and Small Farmers Groups), and ordinary group members of six co-operatives that is comprised of some of the most developed SFCLs in Nepal and secondary data on the analysis of 33 SFCLs, the paper addresses these issues by looking into the financial technology employed by the selected SFCLs - an outgrowth of the Small Farmer Development Programme (SFDP) of Agricultural Development Bank of Nepal (ADBN) placing special emphasis on the design of savings and loan products, and the savings mobilisation and credit delivery processes of these member-based grassroots organisations. Findings reveal how these co-operative microfinance institutions achieved astonishing performances. The paper highlights the key success factors and prospects for future development. [based on author abstract]