UB Co-operative

Access to basic financial services

Access to basic financial services is a substantial problem for many of the poorest members of society with whom Development Nepal works, hindering the ability for people to graduate out of extreme poverty. We understand the need to reduce vulnerability to shocks through building up savings, and the ability to access micro-loans without providing collateral, so in 2005 we established our first community Savings Groups.
Members of a Savings Group save regularly, and then on a monthly basis, the Group members meet and agree who can borrow the collective savings. This approach provides a structured supportive approach to encourage savings while offering the ability for even the poorest to have access to micro-loans with robust local accountability – as the Savings Group members know each other and the associated loan risks - evidenced by the minimal number of defaults.
While the Savings Group members ultimately decide which requests for loans are acceptable, we strongly encourage socially responsible loans that are focused on livelihoods and income-generation.

A New Chapter

Having worked in Sunsari for over 15 years, Development Nepal and its local partner UCHEP have established Ujyalo Bhabisya as a trusted pro-poor brand. We believe that now is the time to capitalise on the Ujyalo Bhabisya brand and create a sustainable future through the establishment of a strong and successful financial co-operative. In 2015, Development Nepal began the process of bringing together the Savings Groups into an Ujyalo Bhabisya Co-operative. The Saving Groups remain an integral part of the Ujyalo Bhabisya Co-operative, however through establishing a Co-operative we aim to enable:
1. better use of savings and a greater number of loans – as most Saving Groups had saved too little money to meet the demands of all Saving Group members, while other Saving Groups had excess savings that were not being used;
2. a more robust savings and loan infrastructure – that would ensure greater sustainability; and
3. ultimately, for the Co-operative to become self-sufficient, and generate funds for the traditional Ujyalo Bhabisya Programme activities of child and adult education and maternal child health.

Ambition
Development Nepal’s ambition is that by 2020 the Ujyalo Bhabisya Co-operative will have:
• 2,000 saving members
• 500 loans annually
• Savings of £100,000
• Generated income that covers at least 50% of running costs

What is Development Nepal’s role

Development Nepal has been working with our local partner, UCHEP, and our local Nepali team on the ground in Sunsari to ensure the Co-operative is established with the necessary governance, and policies and procedures to thrive and grow. We are providing funding for the majority of the running costs of the Co-operative as it establishes itself, the running cost balance being met by income generated by the Co-operative. We have also provided an interest-free loan, and will be topping this up later in 2017 to help scale the capital in the Co-operative and therefore enable a substantial increase in the number of socially responsible small loans that can be made by the Co-operative. As trustees of Development Nepal trustees we have a responsibility to ensure charitable funds are used in according to their objective, and part of this responsibility requires that we ensure appropriate financial management and oversight by instigating robust financial management practices, employing local auditors in Sunsari, the services of a part-time professional finance consultant in Kathmandu, and a trustee and advisory team with substantial internal and external audit experience. Development Nepal trustees and advisors provide their expertise and time for free.