Microfinance is not a dole. Microfinance service providers are not in an altruist mission. They are special purpose vehicle to address the need for easy access to finance for poor and underprivileged in developing economies. They are business enterprises striving to work on a win-win model.
Cambodia presents a good case study for understanding the effectiveness of microcredit in a country which had tumultuous birth and growth.
Cambodia became a free country in 1953. The country had gone through a politically volatile atmosphere. It was under French protectorate for nearly 90 years, under Japanese occupation for 5 years. The country experienced a bitter civil war for more than two decades and suffered a major genocide under Pol Pot regime. The relief and calm came in at 1991 when it was held under United Nations Transitional Authority. In 1993 it became a country, what is now called Kingdom of Cambodia. In recent years, reconstruction efforts have progressed and led to some political stability through a multiparty democracy under a constitutional monarchy.
Needless to say, the financial sector in Cambodia was in near shambles. The National Bank of Cambodia was established in 1954. Owing to the political turmoil during the Khmer rouge regime the bank was closed and even the building was destroyed. In 1993, it was rebuilt from scratch. Gradually, the banking system was strengthened and modernized and Cambodia became one of the strongest growing economies. As of now per bank branch ratio in Cambodia is 6 branches for every 1 lakh adult population
Given, the weak state of the financial sector, access to credit for the poor and marginalised was a great challenge facing a fledgling economy. Initially, the source of micro credit was from donors and NGOs. Without a working banking system, organizations such as GRET (1991), World Relief (1992), ACLEDA and CRS (1993) initially ran microcredit projects by physically handling cash transfers.
In Cambodia, the opportunities for formal employment are scarce and many people turn to self-employment through creating small businesses. Many of these self-employed entrepreneurs are women, who make a living with scarf weaving, noodle making, hairdressing, tailoring, and silk weaving. Informal credit could not provide adequate working capital for these small businesses, and the lack of financing often prevented them from growing and becoming sustainable
National Bank of Cambodia, since 1994, played an active part in providing a boost to the microfinance sector. In 2000 it passed decree on microfinance regulation and it was formally implemented in the country. ACLEDA transformed from an NGO to a microfinance bank. This was a pointer for other NGOs to enter formally into the business of microfinance.
With a view to empower and embrace all the Microfinance operators, Cambodian Microfinance Association (CMA) was established in 2004. It is an NGO and acts under Cambodian law. Membership of CMA is mandatory for microfinance financial service providers. It acts as a friend, philosopher and guide for its members. Today CMA represents 86 members.
Microfinance operations in Cambodia have well addressed the target group meant for the purpose. Nearly 80% of MFI clients live in rural areas and 81% are women beneficiaries. The repayment rate from clients was almost up to 98% before the financial crisis in 2008. MFIs in Cambodia have been shown to empower women as the head of the family who often have good cash management skills.
With a view to get large-scale, reliable, and comparable information on client perceptions of the access to and quality of services offered, Hivos and MIX developed the Voice of the Client (VoC) initiative. Mix is a partner to Cambodia Microfinance association.
The major negative responses were received for fair and respectful treatment of clients. More than 80% of the respondents to the query replied "No". Another important outcome was that more than 85% responded that financial service provider's staff demanded an amount more than what was due from the client and did not provide a receipt for the payment.
Cambodia economy will need a sustained support from microfinance service providers. Nearly 65% of the population is in the age group of 30. Though an agrarian economy, the service industry is quite prominent. Garment export and tourism are growing.
The ecosystem is now well established. National Bank of Cambodia is playing a regulator's role, frequently monitoring and providing directives. Recently it has capped the rate of interest at 18% on micro credit.
The population of Cambodia compares with the population of Bangladesh. The annual household income per capita of Bangladesh as measured for 2015-16 is USD 1314. The country has been upgraded to lower-middle income category from poor. From the ruin of tyranny and genocide, Cambodia has come a long way in just about 20 years, taking 1995 as the base for the counter.
Microfinance and financial inclusion is no more a choice. It is an inevitable infrastructure for growing economies. National Bank of Cambodia has been playing a proactive role in the area of microfinance, but there are still a lot of lacunas. Watch out, investors, mobile service providers and fintech software companies. Present day Cambodia is a big opportunity.
These players may focus on demand side of the sector and innovate new lines of products and services. Software applications may enable flexi credit products like Kisan Credit Card of India apart from fixed line of credit.
Droplets make an ocean, though a clichéd statement, is relevant to the Cambodian economy. A steady growth of microcredit is sure to have a major impact in directing the macroeconomics of the country the in the years to come.
The Meticulousness of efforts to ensure customer delight by each of the team member during the course of the project is appreciable. - Data Archival Project
Overall we are happy with the services provided by Nelito. The implementation team is sensitive to our support requirements and does a good job.
We are extremely thankful to the whole team who have devotedly committed and created this excellent database. Much of our time was wasted in data retrieval from i link where we were facing lots of issues.
You have given us an awesome product which is superior to our Finacle itself in its display capabilities. The great idea of taking pdf/word/excel option is simply superb. Merging the party code and Finacle CIF and account numbers are another feather in the cap.
We have successfully made Nelito's Fincraft Software for NBFC live in early March for LOS,LMS and Sanjiv Khalkho, Arijit Chakraborty with his team have been very instrumental in making this software live . I would like to appreciate on the turnaround time during the go live phase of the team in getting some of our key requirements done and helping our users to use the software for recording and disbursing all the sales from the software.
In technology side I would like to praise Pramod Navale and Ganesh Khetmalis for in depth knowledge of the product and their technical skills is outstanding. Looking forward for the continued relationship for our next release and whole of 2018.
"We are extremely pleased with the kind of support extended by you and your team for our year end work. Although whole bunch of people worked for making the support seamless from your end, my special thanks to following resources. Anurag, Arpit, Arvind, Pranit, Suraj, Udgran, Nilesh, Leena and Udgrand. Also, thanks to all others who have supported us directly or indirectly at your end."
"Nelito has Good knowledge of industry. Good customer orientation. They were Flexible and Open to new ideas and suggestions."
"For a Bank of our size, this system suffices and is very cost effective. Almost all of the bank’s activities run on the one system. Nelito constitutes a partner more than a supplier and the relationship includes provision of the bank’s underlying technology as well as its Fincraft range of applications."
"The best mix of functionality and technological support and our vision of “Cash Less and Paper Less” work environment for Sonata has come true with our technological partner Nelito. I highly recommend FinCraft Core Microfinance platform and especially integrations with a number of third party services."
"Nelito has successfully deployed the Online Reporting and Management Information System (ORMIS), which has streamlined the reporting process and their analysis. Its team is responsive, provided satisfactory support and has sound expertise to deliver time sensitive & critical projects. Exemplary team work."
"We are happy to use FinCraft Data Archival & Retrieval solution from Nelito Systems; it has given huge ROI in terms of saving revenue by retiring legacy applications. We get all desired reports in a timely manner from the solution."
"Nelito is known for its exemplary services to the users at all times. Your team provides excellent service and they are pro-active in providing solutions."
"On the whole a professional and capable and competent team. Providing solutions adapted to clientele updated on technology front."
"Proactive & professionally supportive, technically skilled team."
"Fincraft CBS software & Doorstep Banking Solution helps our society’s functionality towards digitalization & paperless working. It reduces our manpower requirement and workload, also gives us fast reporting for our institution as and when required."
Exemplary relationship set by Nelito’s PCS team which helps project to grow vertically. We have always been very impressed with the quality of service we have received from Nelito. They are reliable efficient professional and above all truthful. This alone sets them out from much of their competition.
"E-district Manipur project was undertaken and successfully implemented by Nelito in a record time. The online services offered under this project has made a marked difference in the quality of life of the citizens and is taking the state towards a digital Manipur."
"On 20th of November 2016 our bank data was migrated to FinCraft and we have completed one year successfully in FinCraft. So we thank all the team members of both IFTAS and Nelito for your great co-operation in this success. We expect more & more co-operation in implementing new technologies in banking sector from your side in future."
"My bank is working with Nelito from the last about 9 Years and the services provided by the company may prolong our association."
"The Bank is associated with M/S Nelito since 2002. M/S Nelito Systems Ltd has been our CBS vendor since 2009. The Products, quality of service offered by them are excellent. They have a very good support team and are trained enough for handling any type of situation."
"We appreciate your local team who continuously supported & assisted our team to meet the goal."
"Knowledge and service provided to the bank is beyond expectation. And we would definitely engage and recommend solution to others."
"As Vendor strict adherence to process & procedures. Risk Mitigates in Place. Flexible to customer requirements."
"Bank has implemented CBS of Nelito Ltd in the year 2008-09 in phase manner. Also integrated RTGS/NEFT, CTS, MMS etc. which help us in smooth automation of banking operation."
"Experience during development of Rating Engine Module has been good in the context of commitment to meet timelines & lot of hard work has been put by Nelito's team."
"Everything was successfully implemented and tested. The implementation was professionally done in a very efficient and cooperative manner. Migration was very smooth."
"Nelito and its team has always been supportive and efficient in achieving the tasks set up by the Dept. Apps developed by the software engineers for the Public Health Dept. have proved to be excellent among the top competitors and have been acclaimed for its effective service delivery to the end user at the grass root level which is the foremost object of any Govt. organization. Many thanks for the sincere efforts."
"We appreciate Nelito team who were always on time and responsive to our needs and changing ideas. They worked efficiently from the project inception to its completion in a timely and professional manner. Their understanding of this space has been invaluable to the success and launch of 'PMAY CLSS' app."