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Catering to the financial need of people under low income strata has always been a focus of NMB Bank Limited. The bank has established an independent Micro Finance Unit (MFU), which is solely responsible for understanding the needs of such people and providing financial services to satisfy those needs. MFU is focused on the unbanked segments of the Nepalese economy, which stands around 60-70 percent of the total population.
In commercial bank history, NMB Bank has set record of dramatic growth within the timeframe of last 6 years. With the Bank’s growing portfolio, it was obvious to grow microfinance multi-dimensionally in terms of structure, working modality, added responsibilities, multi-task with innovation and area of coverage. In the other hand, the mandate to liaise with Nepal Rastra Bank’s Directives for deprived sector lending has further retained microfinance team spirit and strictly focused on its micro-banking services.
NMB Bank has been providing microfinance services in two ways- wholesale lending and retail sales. For wholesale lending, the bank has entered into an agreement with several Micro Finance institutions (MFIs) in the country. MFIs are the middlemen between the bank and the people, and help to provide the bank’s services to people in rural areas of the country where the bank is not present. In addition to that, through MFU, the bank is itself taking the services to the people in need. The Bank has mobilized its branches and staff to serve the financial requirements of low income people and continues to invest in the skills of people by providing collateral/non-collateral loans to clients on group guarantee basis, with reasonable interest rate to provide them the foundation for employing their skills in productive work. Farmers, small household entrepreneurs and artisans are the major beneficiaries of the bank’s services. Further, the Bank continues to endeavor towards empowerment of woman by means of financing their skills and encouraging entrepreneurship to gain semblance of financial independence.
With the spirit of serving poor and passionate in microfinance, microfinance team has always shown its dedication beyond its regular task which is why within a year time period, microfinance have been able to sign Memorandum of Understanding with various reputed NGOs and INGOs serving in different parts of the Nation. The main concept behind the agreement is to access to finance in remote areas, capacity building of locals, educate financial literacy and to proper channelize market access to farmers. To give a taste of differentiation, we have tie up with Lumanti Nepal for low cost housing, Blueberry Hill Charitable Trust for access to finance in hilly regions, Heifer International Nepal for promoting animal husbandry and Employment Fund Secretariat for accessing finance to graduate clients after completion of skill enhancement training.
The expanding role of microfinance in NMB Bank would be more concentrated on reaching needy people regardless of geographical obscenity where challenges will much lie in access to finance, skill building and market access for which we would be focused on tie up with various institutions for value addition in microfinance outreach.