Technology helps Decent Business Operation of Credit Unions in Nepal

Prakash Prasad Pokharel

Acting Chief Executive Officer, NEFSCUN

Equipping all facets of NEFSCUN and its widespread members with the innovative technology is one of the most important agendas in Nepal. This has emerged as a prominent issue not just because of COVID 19 catastrophe but also techonology being a part of this year's national cooperative theme that reads: Cooperatives in Decent Business and Technology. This write up has prioritized towards the urgent need for strengthening credit union movement and its business. I don’t see second option available to it at this critical juncture of pandemic-stricken global scenario. It is a must and if we don’t sincerely act in this direction, it's going to hurt us further in the long run. This is the lesson learnt from the protracted COVID-19 pandemic.

Technological application has multiple benefits. It reduces the operating cost, optimizes efficiency, creates new revenue channels and above all, brings transparency. To put it in perspective, it uplifts the capabilities of NEFSCUN and our ever broadening family. This would boost in additional confidence in the public domain furthering the Nepalese cooperative movement in general. Technological enhancement would also give a cool look to the cooperative sector, which would eventually excite the generation Y and Z towards one of the constitutionally recognized pillars of upholding national economy. Realizing this fact, NEFSCUN has been diligently endeavoring to address the urgency of digitalization by upgrading, researching and developing latest technologies to respond and enhance emerging digitized ultimatum of credit movement.  

Members Service for Users: Members play pivotal part of any cooperative. SAACOS delivers different kinds of services to their members, but accessing those services could be difficult for their members. For instance, in most cases at present, members need to make their physical presence at the SAACOS to acquire minor information on balance and transactions. 

We strive to work towards easing this problem in the best possible fashion. Making all the information and services accessible to the members at their fingertips is our fundamental concern. I don’t exclusively want to limit the possibilities only at e-Banking and Mobile Banking. We should move towards making a comprehensive customer service portal for every SAACOS and NEFSCUN should build the common infrastructure to bring the Capital Expenditure (CapEx) down for our members to inculcate and internalize such technology.

Making the money deposited portable, accessible and transparent: Although cash is king, carrying it is risky and difficult. So, members of SAACOS should be able to access and use their money digitally and on-the-go. SAACOS should be able to provide Debit Cards to their members, which should work on all the ATM Terminals all over Nepal. We should also work on alternative channels like QR (Quick Response) Code Payment and have integrations with the Mobile Wallets. Again, for SAACOS to be able to do this, NEFSCUN should would work on building common infrastructure usable by all member SAACOS. However, credit unions started to initiate QR code in some extend that is still lacking innovation and legally acceptance in Nepal using by non-formal financial sectors.

Digitalization of Internal Operations: Most of the SAACOS now have paper based internal business processes. Not only is this costly but also is slow. Digitization of internal operations for NEFSCUN as well as our members of credit movement would make our internal processes further efficient, transparent and cost-effective. Membership management, Loan application to approval, HR management, Office Management, Internal control system, Inventory Management, Financial reporting, Member information system, are the most important areas for digitalization.

Monitoring, evaluation and reporting: On the NEFSCUN front, I want to aggressively work on building internal tools and re-engineer our business processes around member monitoring and evaluation. We would work on building a Management Information System (MIS) to help us make prompt decisions and rapid reporting. For it's practical realization, NEFSCUN needs to conduct scientific research way forwarding to response member expectations. 

Importance of Technology in Business: Technology drives innovation and innovation is the path to make business successful. Innovation in business has the same impact that steam had on the industrial revolution. In fact, it’s hard to imagine any business that has not benefited from the digital revolution. Even something as hands on as agriculture uses computers. Farmers use computers for production records, financial planning, research on technical issues, and procurement.

Information technology fosters innovation in business. Innovation results in smarter apps, improved data storage, faster processing, and wider information distribution. Innovation makes businesses run more efficiently. And innovation increases value, enhances quality, and boosts productivity. Some of following reason technology has enhanced the following some radical development in business: Online shopping · Digital marketing is more efficient than high cost newspaper, television, and radio advertising. Social networking is more efficient than going to clubs. Cloud computing is more efficient than a private computer network.

Technology has given business the tools to solve complex problems likewise Information technology allows businesses to make better decisions and improve marketing. Technology has improved resource management with supporting more members care of the credit union. The major objective of the business is to increase profits satisfying members where innovation, servitization and digitalization are the best way to make more profits, faster, efficient, decent and sustainable which is not possible without mainstreaming the technology in fair business of credit union.

Regarding such phenomenon, there some legal and management constraints. In order to getting easy access of digitalized credit movement in Nepal, for example Payment System Operator (PSO), it needs to register another entity as a company form which enforces that a separate from credit movement. Similarly, credit movement is yet to receive the official recognition as a formal financial sector by the government which stands as a biggest impediment for a paradigm shift of national digitalization era in a cooperative sector envisioning favorable policy of cashless, paperless and technology based transaction. Security of data, its reliability and system audit are also areas that have ample room for improvement.  Hopefully, the worldwide upsurge of COVID-19 pandemic awakes the policy makers from slumber to speeding the enforcement and support of digitalizing the business of Nepalese credit movement that remains as a burning issues expected to be eagerly and cautiously addressed by the credit union fraternity.