Useful for National college students . (specially)

1. Field Presentation
Pokhara, 2012
Presented By : Mr. Milan Regmi
National College (CED’s)
1/14/2013 Regmi Milan 1

2. Comprehensive Analysis on Different
Thematic Areas
Impact of Income and saving on client
Different types of Risks associated with MFI’s
1/14/2013 Regmi Milan 2

3. Muktinath Bikas Bank
Established as a Limited Bank as per Bank and
Financial Institution Act, 2063 and Company Act,
2053 on 2063/9/19.
• "B" class regional financial institution
• Providing micro finance services since Baishak
2065
• working areas: Syangja, Kaski and Tanahun of
Gandaki Zone
• Main Branch Prithivichowk
• 13 branches providing microfinance services
• Number of active borrowers: 26,046
• Number of depositors: 40,576

4. Paschimanchal Grameen bikas bank
• Established in january 1st 1994
• Head office: Butwal
• Sub branches: 39
• Developed from grameen model
• Objective: poverty alleviation of the rural poor
through credit delivery system of the western
region of Nepal
• The unique features of the bank are: Area
approach, well defined target group, group
guarantee landing approach, no physical
collateral required, disbursement of loan at the
centre.

5. • Number of Clients Served 52,824
• Number of Active Borrowers 40,322
• Number of Active Depositors 52,824

6. Impact of microfinance on client’s income & savings
Survey
HH1
• Duration 3yrs
• Initially took Rs.30000 loan
• Now a fancy owner,
• Monthly income Rs.60000
• Monthly savings of Rs 3000(used for general purpose)
HH2
• Initial loan amt Rs. 20000, 30000, 40000
• Now a restaurateur and also does vegetable farming
• Monthly income Rs.150000
• Monthly savings of Rs 5000( invested in shop)
HH3
• Initial loan amt Rs.20000
• Now involved in poultry farm
• Monthly income Rs.45000
• Monthly savings of Rs 1000

7. Impact of income & saving of PDB
Before After
• Loan Sources:
Moneylenders(36%), relatives PDB (20%)
• Income
Rs 500-4000 p.m. Rs 5000-20000
• Saving
0 Rs 100-1000 p.m.
• Investment
0 Rs 50-1000 p.m
• Consumption Expenditure
Rs 500-4000 Rs2000-8000 p.m.
1/14/2013 Regmi Milan 7

8. Impact of income & saving of MDB
Before After
• Loan Sources:
Moneylenders(36%), relatives MDB (20%)
• Income
Rs 500-4000 p.m. Rs 5000-20000
• Saving
0 Rs 500-5000 p.m.
• Investment
0 Rs 500-3000 p.m
• Consumption Expenditure
Rs 500-4000 Rs3000-10000 p.m.
1/14/2013 Regmi Milan 8

9. Comparison between PDB and MDB
• PDB • MDB
 Loan use • Same; e.g.
 Income generating Poultry(20000)
activities; e.g. Goat farming
(8ooo-60000)
 House Hold Expenditure • Rs25000-28000 p.m.
Rs. 13000-15000 p.m.
 Savings Rs 500-900 p.a • Rs4000-5000 p.a.
 Investment
• Poultry & business(bulk) • General use
 Profit
• Rs 40000-45000 p.a. • Rs 50000-60000 p.a.
1/14/2013 Regmi Milan 9

11. Comparison Through Pie Chart
PDB Loan MDB Loan
Expenditure Savings Expenditure Savings
Investment Profit Investment Profit
4% 7%
2%
19%
16%
58%
87%
7%
1/14/2013 Regmi Milan 11

12. Risk : Types and Its Comparison
• What is risk?
Uncertainty/Variability around the possible
future returns.
Standard deviation is the measure of risk,and
can be related with the expected rate of return.
σ =Diversifiable risk+ Non Diversifiable risk
=unsystematic Risk + Systematic risk(β)
1/14/2013 Regmi Milan 12

13. Return SML
Rm Risk
premium
Rf
β β1=1 β2 Risk
Relating Risk and return Under Capital Asset Pricing Model(CAPM)
1/14/2013 Regmi Milan 13

14. Calculation Based on CAPM approach
• E(Rj)=Rf+βj[E(Rm)-Rf]
Where,
E(Rj)=Expected or required rate of return on asset i
Rf = Risk fre rate of return
βj =Beta of asset i
E(Rm)= Expected rate of return on market portfolio
1/14/2013 Regmi Milan 14

15. Paschimanchal
Graameen Bikash
Bank
Muktinath Bikash
Bank
General Banking
Risks: on
Microfinance
Banking
Visited
Organizations
Risks
1/14/2013 Regmi Milan 15

16. Paschimanchal Grameen Bikas Bank
Risks undertaken/Faced Adopted Mitigation Measures
 Household Conflict  House hold Counseling
 Will full defaulter(1.5% of  Community
3%) Discouragement/Distrust
 Multiple Financing  Capacity Building
 Technological know how? Trainings
 Project Failure  Client Awareness
 No Insurance Coverage  Continuous follow up
 Staff sincerity is the prime
most important!!
1/14/2013 Regmi Milan 16

17. Muktinath Bikash Bank
MicroFinance Banking
Risks under taken/faced Mitigation Measures
 Collateral Free Loan  Orientation to clients
 Low networking strength  Hiring effective HR and
 Poor database management implementing HR plans
 Political Influence  13 guideline risk mitigating
 Falsification/ False rumors fame work
 Liquidity Management  Round table talk
 Encouraging Short term -
Investments
1/14/2013 Regmi Milan 17

18. 1/14/2013 Regmi Milan 18

19. Conclusions and Recommendations
1/14/2013 Regmi Milan 19

20. Greeting from Pokhara!!!
Thank you for your patience!
1/14/2013 Regmi Milan 20