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StratMicrofinance Nepal promotes an approach to microfinance that combines the traditional development management approach with an entrepreneurial mindset, in an effort to accelerate the “promulgation” of microfinance projects in Nepal. The concept targets a closer collaboration between microfinance groups and entrepreneurs, so that more investors for the microfinance projects can be found, who in addition to financial resources also contribute to the marketing and selling of the products manufactured by microfinance groups.
The steps we take to our project approach are as follows: we initially set up a women microfinance group and use part of the fees of our volunteers as starting capital for the women group. We then start by setting up the infrastructure and promote mutual trust, responsibility and accountability amongst group participants. Following this we actively promote women empowerment by educating women and their partners on the benefits they will have from participating in the microfinance project group and their potential financial rewards. Next we set up an individually tailored instruction program and teach the women basic business skills. Then during this course of instruction we will discuss their individual skills, interests and education and we will decide on one joint business activity. If needed we will train the women to acquire the specific skills needed to produce the respective goods. We will accompany the microfinance women group from project inception to accomplishment – that is the successful running of their business, and we will be there to help them decide on investment decisions and marketing activities to increase their sales. In our approach women firstly get the chance to accomplish a course of instruction, for the successful attendance of which they get rewarded with a certificate. This for itself is a great motivator and empowers women, while it also raises their self-esteem and gives them incentives to invest in their children’s and in their own education. Once the project has become successful and the business is making a profit, participants will act as microfinance ambassadors, motivating other women to follow their example. Thus, we expect that this approach to development will expand rapidly in Nepal, since its promotion is “instigated” at root level.
The key to success in our projects is the combination of active women empowerment through specific education programs and the course attendance that is rewarded with a certificate raising women’s self-esteem. Moreover, since we accompany the project group through all stages of the project we can monitor their investment decisions and advise them on marketing activities. Last but not least because we use part our volunteers' fees, we are able to even help the poorest of the poorest, who otherwise would not get the chance to actively participate in a microfinance group, because they have no capital at all to invest in any productive activity.
However, we believe that in the near future there is even a better way to promote self-sustainable, effective and efficient microfinance projects. We hope that in the near future we will be able to convince entrepreneurs, that by having part of their goods produced by microfinance groups they can get financial rewards too. Firstly, being associated with a microfinance group, shows that you as an entrepreneur have a sense of commitment to your wider community and proves that you are a company committed to “social values”, selling “ethically produced goods”, and that your business activities, unlike those of your competitors, make a substantial contribution to poverty alleviation and sustainable development. Thus, buying your company’s products equals investment in a good cause and you can therefore expect an improvement in your image, this commands a higher price for the goods you sell. Secondly, you will not have to carry the burden and the risk of producing your goods, for outsourcing production to a microfinance group gives you the same “managerial and financial advantages” any other outsourcing activity does. More than that, you will have the advantage of having a highly committed workforce, full of enthusiasm to learn and produce the goods to your full satisfaction.
Therefore, StratMicrofinance is promoting an approach to microfinance that encourages entrepreneurs to commit their production to social and ethical values and make a contribution to development management by actively co-operating and collaborating with microfinance groups.
Read the article on Microfinance and Entrepreneurship if you want to know more about Carla's approach to promoting Microfinance by collaborating with entrepreneurs.
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