Organizational Profile

Jana Utthan Samudayic Bank

 
The Community Banking Initiative
                    
                        (Class D Financial Institution licensed by Nepal Rastra Bank)
 
Introduction
 
Financial Institutions are established in Nepal with the motive to help uplift the economic situation of the downtrodden Nepali people. However, most of the finance institutions are established and concentrated in urban areas and run in conventional way. So the rural poor have no access to the financial services. Many of the development agencies have attempted to create groups and run micro-finance programs but after the completion of their projects such groups are left unnoticed with no further idea and help. According to the World Bank study still around 50% of the total population has no access in financial services.
 
The Jana Utthan Pratisthan undertook the research outcome (Social Inclusion in Microfinance by Dr Man Bahadur Bk, 2010) to promote community banking for building inclusive financial system and took initiative to establish Jana Utthan Samudayic Bank Ltd. with some new ideas and techniques such as ‘credit first individual intervention’. Even though it is registered under the microfinance development bank it has been designed as the community banking initiatives. The main aim of this bank is to promote financial inclusion in community level so as to enhance economic situation of the rural poor. Its motto is "Building Inclusive Financial System Extending Service to the poorest of the poor" It also aims to promote the indigenous knowledge and traditional skill to bring it up to the commercial scale. The bank has been designed in such a way to reach the most unreached clients of the community with some specific model and products.
 
The Bank has been registered in April 10, 2010 under Company Act. 2006 and started banking operation from  November 14, 2010 under the Bank and Financial Institution related Act,2006. Since its establishment the bank has been involved in the Global Microcredit Summit Campaign and received certificate of appreciation for its contribution to bring the poor families out of poverty. Likewise it is also involved with the Smart Campaign for Client Protection. Moreover, the community banking has been recognized as the third generation microfinance (Nepal Zone of Peace: A Revised Concept by Isabelle Duquesne published in 2011).
 
Vision
 
The vision of the Bank is to contribute to build the independent, inclusive national economy by uplifting the socio-economic condition of the poor especially focusing to the marginalized and deprived groups/communities through community banking services.
 
 
Mission
The mission of the Bank is to generate self-employment by providing micro-credit, mobilizing savings and supporting for entrepreneurship development to the poor at their door steps to reduce poverty and inequality.
 
Goal
The goal is to work as a self-sustained community bank and serve a maximum number of the poor and the deprived groups through community compatible innovative products at the different communities.
 
Objectives
  • To provide banking services to the rural people focusing to the marginalized and deprived groups/communities who are financially ‘unreached' and support them for self- reliant economic development activities in the communities
  • To provide credits to create income and employment opportunities for the poor and help to reduce poverty level among the rural population in general and women of the target group in particular.
  • To develop an institutional mechanism to link/graduate various informal communities groups, Co-operatives and CBOs into the formal banking institution and enhance their capacity for community banking through business development services, business counseling, entrepreneurial consultation, financial/banking literacy etc.
  • To promote self-employment by exploring the areas of investment in indigenous knowledge, skills and
  • traditional occupations.
  • To contribute for greening of the economy by promoting green job in the community.
  • To help in rehabilitation and social reintegration of under-privileged, landless, war victim, freed kamaiyas, freed haliyas and displaced people through financial services and other social intermediations
  • To promote community project such as community forestry, rural tourism, micro-hydropower, greenery initiatives, renewable energy and community farming/business.
Capital Structure
 
          Authorized Capital: NRs two million (2,00,000 shares at NRs 100 each)
          Issued and Paid up Capital: NRs two million (2,00,000 shares at NRs 100 each)
          Promoters Share: 55 %
          Public Share: 45 % (Bank staff-5%; Institutions, groups and individuals-40%)
          
               The capital structure of the bank is as follows:




















The ownership structure of the Promoter share (55%) is as follows:
 
JUP-Nepal                                             10,00,000/-
16 Individual Promoters                      100,00,000/-
  Total                                       NRs    110,00,000/-
 
 
Board of Directors
 
Mr Rewanta B. Bishwakarma Chairperson Ten years experience in business management
Dr. Meg Bahadur Bk Director Hydropower specialist having more than twenty years experience
Mr. Hari Kafle Director Aeronautic Engineer working for twenty years
Mr. Man B. Bishwakarma Director Running jewelry business since last ten years
Mr. Yam Bahadur BK Director (from JUP) Management Lecturer for ten years
Mr. Baburam BK Director Management Lecturer for ten years
Mr. Madhav P Nepal Director Hotel and tourism business since last twenty years
Dr. Shankar Nepal Expert Director Assistant  Lecturer of economic,Tribhuvan Multiple Campus,Tansen Palpa for 1 year,
Assistant Lecturer of economic[Research Associate],C.E.D.A for 3 month,
Assistant Lecturer of economic,Bhairawa Multiple Campus for more than 7 Years,
Associate Professor of economic,Bhairawa Multiple Campus since 17th January 2006 to till now.
 
Dr Man Bahadur Bk Founder Chairperson Microfinance Expert/Researcher having twenty years of experience
 
 
Special Features of the Bank
 
  • It is an upgraded model of microfinance called ‘Community Banking’- an initiative to involve group members into the bank’s management through shareholding,
  • It has designed the ‘credit first individual intervention approach’ to reach the poorest of the poor,
  • It has designed C+++ services including  individual counseling, skill development training, business development services, entrepreneurship training, business consultancy etc as per the members’ requirement and potential,
  • It is a model enhancing financial operation in the community level providing professional supports from the bank,
  • Its products are designed based on the need analysis of the deprived groups of the community, i.e. enhancing indigenous knowledge and traditional skill into a commercially viable level,
  • Child/youth saving scheme has been a part of the bank’s services to create saving habit as a life skill,
  • It contributes for greening the economy by promoting green job through green saving and green financing especially focusing to the Forest Users’ Groups.
  • It promotes innovative community projects such as community farming, community forestry, rural tourism, renewable energy, small hydropower, community irrigation, community insurance etc,
  • It is an outcome of the empirical research on social inclusion in microfinance and the National Microfinance Summits (2008 and 2010) on ‘Building Inclusive Financial Services’,
  • The community banking model is already tested by JUP-Nepal, the institutional promoter. The organization has been piloting the model since 2000 with various development partners,
  • It is promoted by the development professional working in this field aiming to contribute in building inclusive financial system so as to empower deprived groups and communities,
  • It is completely computer based with sophisticated banking software which includes SMS banking, mobile banking etc.
 
Working Areas
 
Jana Utthan Samudayic Bank has 10 Terai districts from Kanchanpur to Makwanpur and five hill districts (Dadeldhura, Surkhet, Arghakhanchi, Palpa and Lalitpur) as its working areas. The bank has started its operation from Kapilvastu, Nawalparasi and Rupandehi as JUP has its groups functioning in these districts. Bank has now operating through its five branches. Gradually it will move on establishing the branches in other districts as its institutional capacity grows. However, Bank gives more priority to the financially unreached area and people while expanding its services.

 























Market Strategy
 
Since the dawn of democracy in 1990, Nepal Rastra Bank followed the liberalization policy for establishing banking institutions. Likewise microfinance institutions of saving and credit operation are also in increasing trend. However, the following figure shows that still the access of financial services in western part is comparatively lower.
 
 
As the bank has planned to serve the financially unreached/excluded people, its   market strategy is to find out such cluster in the district and design the product accordingly with the community participation. Generally the bank follows the group approach and enhances the existing group’s capacity to affiliate with the bank. There are various informal groups in the communities promoted by the different I/NGOs under the project approach. Mostly, such groups remain dysfunctional once the project is phased out. Even the money generated through such group mobilization remains unused or goes to some clever members’ pocket. Thus the market target of the bank is to transfer such groups into the institutional approach affiliating them into the bank. The specific characteristic of this bank is to provide bank share to the affiliated groups so that they will have the ownership and participation in the overall governance of the bank.
 
Likewise, the bank also needs funding and other types of support such as capacity building of the groups, institutional development etc. from the government and other national and international organizations. Thus it needs to do the marketing with such organizations to fulfill the credit and credit plus need of the groups/clients. The following table gives the idea of our primary clients and the supporting organizations.   
 
 
Primary Clients and Supporting Organizations





























Branches in Operation
 
  • Head office: Milanchowk, Butwal,   Rupandehi
               Phone:071541939
               Email:info@jucbank.com.np
  • Branch Office:Milanchowk, Butwal, Rupandehi
              Phone:071541939
              Email:info@jucbank.com.np
  • Branch Office: Bishal Bazaar, Tansen, Palpa
             Phone:075-522721
             Email:palpa@jucbank.com.np
  • Sub-Branch Office:  Sunwal, Nawalparasi
            Email:parasi@jucbank.com.np
  • Mid-western Regional Office: Kohalpur, Banke
            Phone:081-541794
            Email:banke@jucbank.com.np
  • Branch Office : Tikapur, Kailali
  • Sub-Branch Office: Basgadi, Bardiya
  • Centrl Region Office, Bharatpur, Chitwan
 
 
 Institutional Arrangement
 




















































* Denotes Bank Correspondents
 
 
Branch Arrangement
Regional Offices will be headed by the Chief Operations Officer, Ast. Manager Level.
Branch offices are categorized into three categories
                Class A is with the full banking operations headed by the Operations Officer
                Class B is the sub-branch with limited banking operations headed by the Operations Assistant
               Class C is the collection/service centre headed by the selected Group Leader or Trainee Assistant or Volunteer or Bank Correspondent. Collection centre will be dedicated to the particular Class A  branch.
 
                  (Endorsed by BOD on 27 Chaitra 2070.)
 
Outreach Plan
           
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Districts Coverage 3 5 8 10 10
Client          
1)Group Members 1,500 1,500 4,500 8,500 13,500
2)Active Borrowers 900 900 2,700 4,500 7,000
 
New Clients
         
1)Group Members   3,000 4,000 5,000 6,000
2)Active Borrowers   1,800 1,800 2,500 3,000
Total 2,400 7,200 13,000 20,500 29,500
Branch 4* 6 10 12 15
           
*Includes Head Office in Butwal        
 
Current Lending Partners
 
  • Siddhartha Development Bank
  • Kist Bank
  • First Microfinance Development Bank
  • Malika Development Bank
  • Youth Employment Fund
 
Sub- Agent for Remittance Services
 
  • City Express Money Transfer
  • Himal Remit
  • Prabhu Money Transfer
  • Sewa Express Co. (P) Ltd
  • Western Union
  • Hulas Remittance
 
International Collaboration
 
  • Global Microcredit Summit Campaign
  • Smart Campaign (a Global Campaign) for  Client Protection
  • Habitat for Humanity
  • Employment Fund Secretariat/HELVETAS Swiss Intercooperation