Banks need to fo­cus to ru­ral places

Bhutan Times - - Editorial -

Al­though the mi­cro­fi­nan­cial in­sti­tu­tion plays a ma­jor role in reach­ing out to the ru­ral places, for the low in­come groups, but due to scares and low pop­u­la­tion den­sity, the cost for the op­er­a­tion is very high. But this shouldn’t de­ter the agen­cies in car­ry­ing out their work.

One of the mi­cro­fi­nan­cial in­sti­tu­tions in Bhutan, RE­NEW (Re­spect, Ed­u­cate, Nur­ture and Em­power Women) started mi­cro fi­nanc­ing in 2011 in part­ner­ship with Sav­ing Banks Foun­da­tion for In­ter­na­tional Cor­po­ra­tion, Ger­many. And it is grow­ing strong de­spite nu­mer­ous chal­lenges. Other mi­cro-fi­nanc­ing agen­cies should learn from RE­NEW and help our vul­ner­a­ble com­mu­ni­ties.

The mi­cro-fi­nan­cial project strength­ens the mi­cro fi­nan­cial sec­tor and en­sures eco­nomic sta­bil­ity for poor and dis­ad­van­taged sec­tions of the so­ci­ety.

RE­NEW, a civil so­ci­ety or­ga­ni­za­tion, which looks after vul­ner­a­ble sec­tion of the so­ci­ety, started mi­cro fi­nanc­ing project, first, in Samtse in 2012. Later they had opened branches other dzongkhags and fi­nally in Pu­nakha.

Be­sides lots of chal­lenges, RE­NEW to­day and a num­ber of suc­cess sto­ries to share. Bhutan is a moun­tain­ous coun­try, where ge­og­ra­phy is one of the chal­lenges, the other be­ing scat­tered set­tle­ments. Good road con­nec­tiv­ity to these com­mu­ni­ties will help such agen­cies in de­liv­er­ing their ser­vices in time of need.

To­day field of­fi­cers of RE­NEW walk or drive through rick­ety roads for hours to reach to their ben­e­fi­cia­ries, which re­sults in waste of pro­duc­tive work-hours.

We talk about cor­po­rate so­cial re­spon­si­bil­i­ties, but ex­cept for few com­mer­cials banks do­nat­ing money to ur­ban school and spon­sor­ing re­al­ity shows, we don’t see them get­ting into the ru­ral Bhutan. The com­mer­cial bank shouldn’t only look for profit but should sup­port mi­cro­fi­nan­cial in­sti­tu­tions with vi­able model.

Bhutan can fol­low Nepal model in reach­ing out to the ru­ral pop­u­lace, as the two coun­tries share the same ge­o­graph­i­cal to­pog­ra­phy. How­ever to sus­tain the op­er­a­tion the banks shouldn’t charge high in­ter­est rates.

RE­NEW’s mi­cro­fi­nan­cial in­sti­tu­tion project strive to im­prove the liv­ing stan­dard of the women and their fam­i­lies, es­pe­cially those liv­ing un­der ex­treme cir­cum­stances. Other should join hands to end poverty in our ru­ral pock­ets.

The RE­NEW mi­cro­fi­nance project con­sist of mi­cro loans, sav­ing op­por­tu­ni­ties, credit fa­cil­i­ties and in­sur­ance fa­cil­i­ties. As­sis­tance is also ren­der­ing to vul­ner­a­ble women to be­come eco­nom­i­cally sus­tain­able and in­de­pen­dent women.

Mean­while, RE­NEW mi­cro-fi­nance pro­vides busi­ness loan, agri­cul­ture loan, mul­ti­pur­pose loan, emer­gency loan and also en­cour­age their clients to have com­pul­sory and vol­un­tary sav­ing. The loans do not re­quire any mort­gage. Cur­rently RE­NEW pro­vide loans to 1628 clients.

Our com­mer­cials banks have to play an im­por­tant role in reach­ing nook and cor­ner of the coun­try with a man­date to serve the peo­ple. There must be a change in the fo­cus of the bank­ing sys­tem and make agri­cul­ture their pri­or­ity as more than 70 per­cent of the Bhutanese pop­u­la­tion de­pend their liveli­hood it.

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