BANDH UPDATE Kathmandu, 19 Feb.: Seven vehicles have been vandalized in the capital and Lalitpur since morning Tuesday for defying a bandh by CPN Maoist. Seven protestors have been arrested, local officials said.. CAPITAL’S MORNING TEMPERATURE 5 DEGREES CELSIUS Kathmandu, 19 Feb.: Tuesday morning’s temperature at seven in the capital was 5 degrees Celsius. Mercury is expected to rise to 24 degrees Celsius in the afternoon. nnnn SIMRIK AIRLINES BEGINS FLIGHTS BY FIXED WING AIRCRAFT Kathmandu, 19 Feb.: Simrik Airlines Sunday began commercial flights by fixed wing aircraft. as well. The carrier was previously operation helicopter flights only. After takeover of management of Guna Airlines, the internal airline launched mountain flights with US-built 19-seater Beechcraft. Flights are being operated to Pokhara and Bhairahawa. mmmm. PERMANENT STATUS FOR HIGHER SECONDARY SCHOOL TEACHERS Kathmandu, 19 Feb.: The Ministry of Education is preparing to create positions for thousands of teachers in higher secondary Community, schools, Kokila KC writes in The Himalayan Times. . Higher secondary level studies started in 1992, but till date, there are no permanent positions for teachers at the Plus- Two level. Currently, the government provides grants to 4,000 full time teachers in community Plus Two schools. Teachers working in higher secondary community schools have long been demanding permanent positions. Rose Nath Pande, assistant spokesperson, MoE today said though they had requested Ministry of Finance (MoF) to create permanent positions for higher secondary teachers, but nothing significant had been done. “Recently, we received a letter from the Prime Minister’s Office directing us to give high priority to this issue, therefore, we are sending the same letter to MoF,” he said. MoE has been providing grants equal to two teachers to community higher secondary schools with Education, Humanities and Management faculties and grants equal to three teachers to schools with Science faculty. Grants equal to four teachers have been provided to five districts of Karnali region — Dolpa, Humla, Jumla, Kalikot, Mugu and four other districts namely Jajarkot, Bajhang, Bajura and Accham. Deepak Raj Subedi, president, Higher Secondary School Teachers’ Association Nepal (HISTAN) said the government was unwilling to provide permanent position to community higher secondary school teachers. He said MoF had reached agreement with donors not to create permanent positions in schools. So it created temporary teachers with programmes such as Per Child Funding teachers and Relief Teachers to provide grants. “We had sought 4,000 positions when there were only 1,313 community Plus-Two colleges, but the number has reached 2,600 now, the number of positions should also be increased,” he added. Community higher secondary schools need to complete one cycle of Plus-Two level to get grants for teachers, which means that one batch of Grade XI and XII should complete their course for government grants. nnnn MICROFINANCE COMPANIES DRIFT FROM MISSION Kathmandu, 19 Feb.: The microfinance institutions’ generous dividend pay-outs has left the borrowers with burden of agonisingly high Interest rate, Dikshya Singh writes in The Himalayan Times. The microfinance development banks listed at Nepal Stock Exchange (Nepse) have declared dividends amounting to 25 per cent of the paid up capital on an average, from the profit earned during the last fiscal year. However, the micro-credit borrowers are subjected to interest rate as high as 25 per cent to finance the lavish dividend pay-outs. Despite, microfinance being touted as social business, it is becoming into money minting business at the cost of poor people. The 24 microfinance institutions licensed by Nepal Rastra Bank (NRB) have earned Rs 1.5 billion as net profit by the fifth month of the current fiscal year. Some of the microfinance institutions declared their dividend to the extent of one third of their capital. On the other hand completely profit oriented commercial bank’s dividend declaration stood around 18 per cent of the paid up capital. “Microfinance is a social business so microfinance institutions should not be too much profit oriented, return has to be reasonable so investors also should not expect a lot,” said chief executive of Rural Microfinance Development Center (RMDC) — a wholesale lender to the microfinance institutions — Shankar Man Shrestha. “The profit centric behaviour of microfinance institutions has led to mission-drift and distortions in the whole sector,” he added. However, he called the high interest rate being charged by the microfinance banks as justifiable. “Microfinance institutions do not charge any overhead or service charges as other banks do, moreover, attaining loans from a commercial bank or finance companies are a bothersome and hassling task for rural people,” he said, adding that the beneficiaries also get value added services like vocational training which is equally valuable for a person for additional income. A typical microfinance clients are low-income rural people that do not have access to formal financial services and no collateral too to get access to finance from the commercial banks. Microfinance institutions contribute in poverty alleviation by bridging the gap between financial services and poor people. Microfinance services has helped poor households to increase their income so that they can finance their children’s education, buy assets and protect themselves from financial shocks. But it will be incomprehensible that a poor household which has to pay annual interest of Rs 15,000 to use the loans worth Rs 60,000 will be able to get itself out of poverty using the microcredit. To lighten the burden of excruciating interest rate central bank is mulling over introducing guidelines that will address the interest rates. “At present Nepal Rastra Bank is informally asking the microfinance institutions to lower the interest rates as it has also felt such high interest rate not only hurt the borrowers but eventually whole sector,” said spokesperson at the NRB Bhaskar Mani Gyanwali. At the recently held Third Microfinance Summit here in Kathmandu also, most of the experts had expressed their concern over profit mongering tendencies among the microfinance institutions that has brought distortions in the whole sector. Central bank governor Dr Yubaraj Khatiwada had even asked the microfinance institutions to stop acting like ‘legal moneylenders’ to village people. Dr Khatiwada had urged the microfinance institutions to be happy with normal profit and be able to share their excess profit to their borrowers and also to their other stakeholders including the savers which could be done through a better pricing of their services. nnnn