Kathmandu: The Fourth National Microfinance Member Conference has commenced in Kathmandu. The conference, themed “Healthy Microfinance, Prosperous Members,” was inaugurated by Finance Minister Dr. Prakash Sharan Mahat, highlighting the successful expansion of microfinance to the remote citizens of Nepal due to its vital role in financial inclusion for disadvantaged groups, the poor, and women.

Dr. Mahat emphasized the significant enthusiasm shown by the microfinance sector in uplifting the economically deprived and empowering local economies. He acknowledged the pivotal role played by microfinance institutions in educating citizens in rural areas about savings and loan management across 77 districts.

Reflecting on Nepal’s progress in microfinance since the advent of democracy, Dr. Mahat stressed the sector’s contribution to poverty alleviation, local entrepreneurship, and integration of local economies into the national financial system. He cautioned against the emerging challenges, stating, “Currently, there are some issues in microfinance, and addressing them should be everyone’s concern. Efforts by self-interest groups have been observed, and those seeking to politicize this positive sector will not succeed.”

Dr. Mahat underscored the dangers of non-repayment behavior, urging cooperation between the government, microfinance members, and savers to counteract improper practices effectively.

He dispelled the misconception that loans need not be repaid, cautioning borrowers against falling into such false beliefs. He emphasized the need for collaboration between the government and microfinance members to curb illicit practices and maintain ethical conduct.

Dr. Mahat urged microfinance institutions to align their activities with their stated objectives and focus on serving the community, promoting rural development, local enterprises, and self-employment. The Finance Minister recommended that microfinance institutions refrain from deviating into profit-oriented actions, as this could lead to adverse consequences for both investors and the government.

During the inaugural program, Dr. Nilam Dhungana, the current Governor of the Central Bank of Nepal, praised microfinance institutions for their role in reaching the unbanked population, constituting 21% of the total population.

The conference, organized by the Microfinance Bankers Association of Nepal, received significant attention from various stakeholders, with Ram Bahadur Yadav, the President of the Microfinance Bankers Association, acknowledging the challenges faced by the sector and expressing hopes for improvement.

As the conference continues until Sunday, it aims to bring together representatives from regulatory bodies, policy-makers, government officials, microfinance leaders, practitioners, members, experts, and stakeholders to discuss and address the challenges and opportunities in the microfinance sector in Nepal.