Microfinance uses self-help to benefit rural women in Bhutan

In the September 2011, RENEW (Respect Educate Nurture Empower Women) signed a project agreement with a German savings bank foundation for international cooperation (SBFIC) to establish a microfinance system in a country.

Mr. Bernd Baehr, the Country Representative for SBFIC said the main objective of establishment of microfinance in country is to develop and educate people on the importance of saving money and helping to be independent.

It was found that in Bhutan, many low income households do not have access to formal financial services, therefore, the project objective is to strengthen the Bhutan microfinance forum and create a microfinance institution together with RENEW.

He said, for low or irregular-income earners, making ends meet on a day-to-day basis is a major challenge. This irregularity, not only of income but of expenditure too, makes it difficult to plan ahead. So the project involves various forms of formal financial services, such as savings, credit, insurance and money transfers. “Thus see the financial services as self-help with due consideration for the respective economic and social parameters and increasingly also ecological ones too,” he pointed out.

The project started with 8 staff and 2,676 members in the year 2012 with a total of 26 taking the loan with the amount Nu.449,000 and it gradually increased to 3,968 members in 2013, 4319 in 2014 and 6284 in 2015 and as of till march 2016, the members have increased to 6621 with 15 staff members.

Mr. Bernd says that by the end of the year the members will be drastically scaled up as only five dzongkhags have been approached so far including the recent one in Dagana in March 2016.

Many progress results have been noted so far in the approached dzongkhag where the people who benefitted from the loan have started their own business, built houses and can afford their children to pursue higher studies.

“With our 200 years of experience, and after successful project with around 80 countries, we want to share our experiences with the world” he added.

The main focus is in rural places and so far 95% of the benefits are rendered are women of the age range between 20 to 70 years.

Six dzongkhags were visited so far starting from 2012 september in Samtse, Bumthang, Trongsa, Trashigang, Chirang and Dagana.

Apart from this successful result, the main challenges faced are transportation since very remote parts of the country were visited where there are no proper roads. The problem was also with convincing people as there were trust issues in the past in some of the Dzongkhags like Dagana where the people suffered with similar ideas where they were betrayed before.

The project has been running without license since three years and is yet to get an approval from the Royal Monetary Authority.

 

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