Kathmandu, October 17:

Micro finance institutions can reduce poverty by empowering the poor people if they could be operated efficiently in Nepal, experts observed, while talking exclusively of the example of Bangladesh after professor Muhammad Yunus was honoured with Nobel Peace prize as ‘banker of the poor’.

Harihar Dev Pant, the largest replicator in Nepal and chief of Nirdhan Utthan Bank Ltd (Bittiya Sanstha) said that he took inspiration from the example of Bangladesh to start micro finance programmes in Nepal and to serve the poorest of the poor through credit.

Pant said that he is the ‘first and largest effort at replication’ of the micro credit programmes of Bangladesh here which was started about thirteen years back. He said that micro-finance is concentrated in Terai and Kathmandu valley.

Of the total two million poor people, more than 300,000 have benefited from micro-credit programmes, he informed. Nirdhan was started with two employees in the beginning, taking a loan of $35,000 from the Grameen Trust, a sister organization of Grameen Bank whose chief is Muhammad Yunus.

The programme was organised to honour Yunus and discuss some effective ways to expedite Nepal’s efforts in poverty alleviation initiatives through micro-credit.

Nirdhan already has 43 branches and four-regional offices. It has served over 75,874 households in a total of 424 village development committees. Its investment has already crossed three billion rupees and out of it, Rs 2.63 billion has already been recovered, according to Pant.

The recovery rate is highest in micro-finance institutions compared to other finance and banking sector, according to experts. Grameen Bank of Bangladesh has 11 per cent share in Nepal’s Nirdhan bank.

Ganesh Bahadur Thapa, former governor of Nepal Rastra Bank (NRB), said that if the poor are to get out of poverty, micro credit programmes should be expanded across the country like in Bangladesh.

There is a need to trust the poor, as they are the honest borrowers compared to big ones, said Thapa. Micro-finance helps people to be self-reliant, he said.

Pant said that Nepal Rastra Bank (NRB) needed to be quite liberal to promote micro-finance institutions to reach out to the poor to explore resources and empower them.

Krishna Bahadur Manandhar, deputy governor of NRB observed that micro credit programmes are very useful in income generating activities at the local level.

Other micro-finance experts strongly urged the government to ink friendly policies to

boost micro finance institutions as they can easily reach the poor and needy, do not create NPAs, avoid leakage, support efforts of poverty alleviation programmes of the government and empower the disadvantaged group of people.

A total of eight micro finance institutions are working in Nepal presently with financial help from Grameen Trust of Bangladesh.