Nepal Case Study: Adapting Approaches and Products to Persevere During Conflict
This report describes the transformation of Nepal's Nirdhan Uttham Bank Limited (NUBL) from a community-based NGO into a licensed development bank with 50 branches. The report examines NUBL's experience of operating in a conflict-affected environment, and derives risk mitigation lessons in terms of strategy adaptation, delivery mechanisms and product characteristics.Microfinance in Nepal has demonstrated continual growth in the face of conflict. Nirdhan was founded in 1991 as a micro-lending NGO. In 1996, it transformed into NUBL, a bank focusing on the poor and low-income population in the Terai lowlands and hilly regions of Nepal. It provides credit, savings, microinsurance and money transfer services. Until 2000, NUBL grew organically based on an expansive and client-focused business plan. However, during 2000-2003, NUBL experienced stagnation in client outreach and loan portfolio.Eight years later, NUBL emerged from the crisis with a firm foundation of market-responsive service delivery and the following lessons:
- Early warning systems are crucial;
- Staying put increases client loyalty;
- Risk management and mitigation is an ongoing process;
- Community-based models have merit in challenging environments;
- Communities need both, financial and non-financial services.
