Microsavings, Microcredit and Microinsurance: Financial Products of Small Farmer Co-operatives Ltd. in Nepal
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.
The paper addresses these issues by looking into the financial technology employed by the selected Small Farmer Co-Operative Ltd.s - 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. The paper uses 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 comprised of some of the most developed SFCLs in Nepal. The paper also uses secondary data on the analysis of 33 SFCLs. 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 the author's abstract]
