microfinance Intern Report

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Internship Report of Deprosc Laghubitta Bikas Bank 1

An Internship Report at Deprosc Laghubitta Bikas Bank

Submitted By

Mr. Bikash Neupane

Apex College

Exam roll number: 11220436

MBA

Submitted to

Mr. Phatik Paudel

Intern Supervisor

Apex College

Pokhara University

April, 2013


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ACKNOWLEDGEMENT

This internship would have not been possible without the help of some personalities

and organization in term of suggestion, facilitation, supervision and guidance. This report and

internship would never be achievable without immense support.

Firstly I must thank Apex College for providing me an opportunity to do this intensive

internship report.

I would also like to sincerely thank to Mr. Duryodhan Malla, Krishna Pokherel and

Binod Dhungana of Deprosc Laghubitta Bikas Bank for their untiring efforts.

Also I would like to express my sincere gratitude to Mr. Phatik Paudel, Intern

supervisor, for providing me an opportunity to gain experience and build confidence in me

through internship.

At last I must thank my colleagues for working as a team and making this internship

as a good experience and my students who paid me with bright learning attitude and respect.

Bikash Neupane

Apex College


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EXECUTIVE SUMMARY

The report is specially is meant for the students of the MBA course as of the

requirement of the Pokhara University. In course of fulfilling the universitys requirement, I

was engaged in the Balkumari Branch of Deprosc Laghubitta Bikas Bank and the report is

concerned to a brief study of the operations, functions, tasks and services of Balkumari

Branch.

Microfinance has been playing very important role in uplifting the underprivileged

people and the tagline is also the bank for underprivileged.This bank basically provides the

non collateral loan to the women and help them to run their business and earn their living.

In preparation of this report I have tried my best to provide all the possible and factual

information about the operations, functions, tasks and the corporate information of the

Deprosc Laghubitta Bikas Bank, majorly focusing on their balkumaribranchs operations and

functions where I was engaged in brief and comprehensive form.

In the course of the program, I got chance to be familiar with the daily operations and

trend of the bank. Besides the vast amount of knowledge I acquired about the bank, putting

my hands on the activities of the banks operation, specifically on the Motivation, Loan

Processing, Conducting meetings and data entry.

Finally, internship report ends with the conclusion on the basis of my personal

evaluation and analysis of the banks daily activities I have observed during my eight weeks

of the internship program.


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TABLE OF CONTENTS

ACKNOWLEDGEMENT ......................................................................................................... 2EXECUTIVE SUMMARY ....................................................................................................... 3TABLE OF CONTENTS ........................................................................................................... 4CHAPTER 1 .............................................................................................................................. 6INTRODUCTION ..................................................................................................................... 6

1.1 Overview .......................................................................................................................... 61.2 Background of the Study ................................................................................................. 61.3 Objectives of the Study .................................................................................................... 71.4 Duration ........................................................................................................................... 71.4 Limitations of the study ................................................................................................... 7

CHAPTER 2 .............................................................................................................................. 9OVERVIEW OF THE ORGANISATION ................................................................................ 9

2.1 Organization Profile ......................................................................................................... 92.2 Balkumari Branch profile ................................................................................................ 9

CHAPTER 3 ............................................................................................................................ 10ON THE JOB PERFORMANCE ANALYSIS ....................................................................... 10

3.1 On the job performance ................................................................................................. 103.1.1 Motivation ............................................................................................................... 103.1.2 Conduct Meeting ..................................................................................................... 123.1.3 Loan Processing ...................................................................................................... 12

CHAPTER 4 ............................................................................................................................ 13


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LESSONS LEARNT AND CONCLUSION ........................................................................... 134.1 Lessons Learnt ............................................................................................................... 13

4.2 Conclusion ..................................................................................................................... 13


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CHAPTER 1

INTRODUCTION

1.1 Overview

Microfinance in Nepal has developed considerable history in providing microfinance

services which is evidenced by emergence and growth of a large number of microfinance

institutions (MFIs) and microfinance programs over time. Formal microfinance in Nepal

emerged in 1956 with the emergence of cooperatives that started providing savings and

micro-credit services to their shareholders. Government also recognized potential role of

microfinance services on addressing poverty problems and in 1974 Nepal Rastra Bank

(NRB), the central bank, directed the then two state-owned commercial banks to invest at

least five percent of their total deposits in small-scale finance. In 1975, the Agriculture

Development Bank of Nepal (ADBN) launched Small Farmers Development Project (SFDP),

as a first project to introduce the concept of group guarantee as a substitute to physical

collateral for micro lending. Micro finance particularly focuses on the credit to the poor

especially poor women.

1.2 Background of the Study

As the partial fulfillment of MBA program, this internship was done in order to have

knowledge of the real work environment of the business organization. We learn the theories

in the class room without knowing the viability in the real world. We assume them to be

correct but never know without actually executing those theories in the real life.

As being the student of marketing I knew that its all about communication and how

you present your product and services in a packaged form so that customer will consume the

product and services. So with a curious mind and interest from very beginning I joined

DEPROSC Laghubitta Bikas Bank, which works on microfinance and is one of the major

player in the market regarding microfinance activities.


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1.3 Objectives of the Study

The objectives of internship were as follows:

To gain the first hand knowledge about the workings of the organization. To get used to working as employees so it would be easy for me to work in

organization after the completion of the study.

To learn to deal with customers. To gain practical experience in microfinance sector in Nepal. Clarify personal interests, skills, and competencies, and their implementation

toward development of my career goals.

To gain ideas from the experienced people of business fields. To build confidence to tackle the problems in these fields. Development of personal standards of professional and ethical behavior.

1.4 Duration

As per the Pokhara University MBA Programs requirement of the minimum 8 weeks

of on-the-job placement, the Internship Program in the Balkumari Branch of the DEPROSC

Laghubitta Bikas Bank is of the 8 weeks starting from 23rdjanuary toMarch 8

1.4 Limitations of the study

The following limitations existed during the study:

There was the lack of proper job description as an intern which basicallyprevented dedicated working within particular departments of the

organization.

The 8-weeks-duration of the project is definitely a very short duration and issomewhat insufficient for gaining good job experience.

This report is only for the fulfillment of the requirement of the MBA degree ofthe Pokhara University; hence it is for the study and information purpose only.


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Analytical interpretation, conclusions drawn and recommendations made areonly by an amateur, running MBA student. So, it lacks expertise and

professionalism


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CHAPTER 2

OVERVIEW OF THE ORGANISATION

2.1 Organization Profile

Deprosc laghubitta Bikas Bank, previously known as Deprosc Development Bank, is

the organization established and promoted by the NGO DEPROSC Nepal in 1995. It's

authorized capital is 23.2 million and issued and paid up capital Rs. 11.6 million with the

equity participation of DEPROSC - Nepal , Agriculturral Development Bank, Nepal Bank

Ltd., Nabil Bank Ltd., CEAPRED ( an NGO) and microfinance practitioners. With the

mission, access to financial services helps rural people to come out of poverty. Credit would

create employment and generate income among poor rural families, which leads them to

better quality of life: better access to food, health, education, shelter and clothing, this

organization has been operating in 35 districts has the head office in Shahidpath Narayangarh

Chitwan, Nepal. Major products and services include Voluntary Saving, Loans, Insurance,

Training and Consulting services, Fund Transfer Services.

2.2 Balkumari Branch profile

As an intern I was placed in the Balkumari branch of Deprosc Laghubitta Bikas Bank

which is situation in front of the Balkumari temple. The bank opens from 09:30AM to 05:30

PM (Sunday to Thursday) and 9:30 to 2:00 PM(Friday) and during winter time from

9:30A.M to 5:00 PM. Services provided are as of the services provided by the organisation.It

mainly focuses of small loans to the women. The management team of Balkumari Branch is

as fallow:

Duryodhan Malla - Branch Manager Krishna Pokherel - Accountant Binod Dhungana - Office Secretary Pramila Adhikari - Accountant


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CHAPTER 3

ON THE JOB PERFORMANCE ANALYSIS

3.1 On the job performance

During my internship tenure I worked in Motivation Process, Loan Processing and

conducting the meeting of the group as well as the data entry in the Computer. During the

tenure I was assisted by Duryodhan Malla, Krishna Pokherel and Binod Dhungana who were

very supportive and allowed me to work as like employee.

3.1.1 Motivation. Motivation in microfinance is the first process of the group

formation. The information told in the motivation process, that lasts for a week, depending on

the receptivity of the information are as fallow.

Bank Name- DEPROSC Laghubitta Bikas Bank Every work is done in the group collateral i.e. if any of the group member do

not pay the loan amount then the group will pay the amount of that taken loan

Account opening is done in Rs. 300 which is Rs. 100 for Group Saving,Rs.200 is for Personal Saving and Rs. 20 for Passbook which is not

refundable.

Saving types i.e three types group saving, personal saving and Loan saving Group saving is opened by providing Rs. 100 in initial and Rs. 70 must be

deposited every month which cannot be more or less than 70.Customer can

withdraw this saving when she leaves the group.

Personal Saving is opened by paying Rs.200 and needs to deposit at least Rs.30 and any more amount than that. Customer can withdraw the amount when

it reaches Rs. 1000 leaving just Rs. 100

Loan Deposit is kept 5% of the loan amount for the customers who take loanand is refunded after the loan is paid.


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Interest on deposit is 9% and for loan the interest is 21% in diminishing ratewhich is equivalent to 10 to 12% of normal saving.

Loan can be paid in either 10 or 18 installment. 1% service charge is taken and 0.5% is for the insurance. In case of death of

any member the group will not have to pay the loan amount of the death group

member the insurance will pay the amount.

Documents required are photocopy of the citizenship, if the citizenship is ofbefore marriage then either marriage certificate or birth certificate of a child,

two copies of photos and the name of the desired person.

Abot the installments to be paid if loan is taken like if Rs.25000 is taken, thenin 10 installments they will have to pay Rs. 2810.If Rs.30000 is taken then in

ten installments they will have to pay 3370 and in 18 installments they will

have to pay Rs.2000 and alike.

Loan is given for the activities that are permitted by the government.

Analysis of on the-job performance. During my internship tenure I got chance to do

the motivation works in the group formation in lubu, Nayabazaar and Imadol area. It was a

very different experience working as a motivator as it required a very different approach.

First I watched my mentors motivate the group and the way they give information to the

group and then I also tried the same. Even there was nervousness in first motivation I was

able to cope with it.As motivation is the first step in the group formation in microfinance, we

had to cross check the members in order to confirm that they are not in other group of our

own bank and other microfinance banks. Interestengily we used to find many redundant in

the member even though we used to say the member that they cannot be in two or more

groups. And the motivation period used to be lengthen as we had to again motivate the new


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members.So the experience was very good as I learned how to communicate and convince

even very illiterate women.

3.1.2 Conduct Meeting.Meeting in microfinance refers to the process in which

the group members gather to deposit the savings and ask for the loan in the group stating the

name of the member, the work to be done and the amount of the loan asked for.It takes place

once a month and every member need to attend the meeting otherwise the reason for the

absence should be stated.

During my observation and conducting of the meeting i found it very hasty job to to.It

is because the meeting had to be finished within an hour and the members were in their own

mood and were very talkative.I learned to work under pressure and was success to some

extend also.

3.1.3 Loan Processing. In the meeting the name of the loan asker, the purpose

of loan is stated and the loan processing documents are done in Nepali paper as the

evidence. Then the supervisors go to look the business for which they have asked the

loan and decide how much to grant as a loan.Loan is granted in the office in every

Thursday where all the remaiming formalities are done.

During this work I found the work to be very hectic as many paper works had

to be done.The loan asker needs to be with the witness. Crowd is gathered and is very

difficult to work.But working in loan processing was a very good experience.I needed

to do the paper works and help the customers for the easy loan approval.


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CHAPTER 4

LESSONS LEARNT AND CONCLUSION

4.1 Lessons Learnt

It was my first experience in working in any formal organisation so the experience

was very fruitfull.Some of my experienses includes:

I learnt to cope with pressure, the pressure of work, study and the personal life. Communication with the illetrate and previleged group as we need to say all the minor

details.

Different procedures regarding the microfinace like motivation, conducting meetingand loan processing.

I also knew the sys bank software used to maintain the databse and all the accounts. The financial reporting and analysis part of the bank taught me about accounting

procedures and its rules and regulations. The bank is the business organization which

plays with other people money so proper records are to be kept. The simple account

procedures like debit and credit helped me understand the language spoken in the

company which was in those terms.

I learnt from the branch manager Mr. Duryodhan Malla how to lead the organisation,how to motivate the employees and handle the pressure.

4.2 Conclusion

After doing intern in Deprosc Laghubitta Bikas Bank, I was able to know different

aspects of microfinance and it was a very good real life experience that will help me in the

days to come in the career.The bank is organised but one more staff needes to be added and

all the staff are friendly and as an intern I got the behavior of collegues which made the 8

weeks duration a very short span of time to do all the works.

microfinance Intern Report

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