Microfinance summit concludes with nine-point plan to boost youth entrepreneurship

KATHMANDU: The Fifth National Microfinance Member Summit concluded in Kathmandu on Monday as delegates adopted a nine-point declaration to boost economic transformation through microfinance.

The two-day summit, organised by major microfinance institutions and coordinated by the Centre for Self-Help Development (CSD), was held on March 22 and 23. The declaration’s opening point pledged to “let us spread entrepreneurship and make youth self-employed.” Microfinance institutions and cooperatives committed to promoting income- and skill-oriented training, professional counselling and innovation, including an “earn while you learn” programme at school level to create self-employment opportunities for young people.

The declaration called for more dignified, transparent and respectful behaviour by microfinance staff towards members and for service delivery to be member-centred and responsible. It urged mobilisation of youth in green finance initiatives and broad promotion of the 3ZERO Club — “zero poverty, zero unemployment, and zero net carbon emissions” — among young people.

Responding to climate concerns, the declaration said every microfinance institution and cooperative will take the initiative to build at least one environmentally friendly village in its working area and to encourage green enterprises and sustainable production systems. It also emphasised making microfinance services “simple, safe, and accessible” through digital technology and increasing digital literacy to expand access to modern financial systems.

The summit called for measurable impact assessment and continuous improvement, proposing standards to measure the economic and social transformation of members and an annual process of study, evaluation and improvement. It urged active reactivation of inactive members through financial literacy, enterprise promotion and regular interaction programmes.

Delegates warned against misconceptions such as loan waivers or exaggerated claims about interest that could undermine collective solidarity and the credit and savings services that poor women rely on. The final point committed microfinance institutions, cooperatives, employees and members to work responsibly to address sectoral challenges and to pursue collective initiatives with government and regulators to resolve policy issues through cooperation and dialogue.

Organisers said the declaration incorporated suggestions from summit delegates, analytical input from expert speakers, accounts from women entrepreneurs and the three-decade experience of microfinance practitioners. The summit reviewed the sector’s challenges, opportunities and needs while reflecting on past achievements.

Speakers at the closing session stressed implementation of the declaration. Former governor of Nepal Rastra Bank, Dipendra Bahadur Chhetri, praised microfinance for fostering entrepreneurship and self-reliance, noting that commercial banks and other profit-driven institutions cannot always reach the doorsteps of poor families. He said microfinance “is working to fulfil the needs of the underprivileged so that no Nepali has to live in deprivation and their skills do not go to waste,” while also cautioning that the sector faces challenges that must be addressed.

Former governor of the central bank, Dr Bijayanath Bhattarai, highlighted non-performing loans as a major concern, noting that the sector — which covers about 6.4 million families through roughly 50 microfinance institutions — has non-performing loans near 8 per cent. He urged institutions to strengthen internal governance rather than rely solely on external assistance, saying that development is possible only if citizens and institutions follow good governance and that “one must build their own house.” He also called for a shift from purely lending activities towards entrepreneurship development and greater use of technology.

Shankar Man Shrestha, chairman of the summit organising committee and CSD, reflected on the sector’s early days and urged full implementation of the declaration. He said the primary objective of microfinance is to reach poor people who lack access to banks and described microfinance as “a system connecting heart to heart,” adding that with the right methods, the sector’s risks can be “zero or minimal.” He called for continued work under the 3ZERO concept.

Bechan Giri, member secretary of the organising committee, said the summit provided guidance to make the microfinance movement more member- and community-oriented and described microfinance as “not just a financial service but a social campaign” for empowerment. The closing ceremony also honoured outstanding employees and institutions.