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Njord Andrewes, Investment Director at NMI, writes about his experiences on a field visit at RGVN in Sikkim, India in December 2014.

RGVN is a microfinance institution focusing exclusively on northeast India. RGVN operates in five states in northeast India and serves almost 200 000 Borrowers.  This region sees 75% of its work force dependent on agriculture, while primitive and inefficient methods of farming had caused the region to have to import food from other Indian states. Ethnic differences also cause this region to be one of the most challenged in the country. NMI invested 3 million US dollars in equity to help the company reach these clients.  
RGVN is among the very few microfinance institutions, which has its focus entirely in the Northeast India. Its core products include loans for micro-businesses and subsidized loans for clean water and sanitation, as well as life insurance. RGVN also provides social services such as financial literacy training, health check-up camps, animal health camps, food processing and knitting training.  10% of the company’s profits are dedicated to these social programs. 

To reach the Indian state of Sikkim, I fly in to Bagdogra, Darjeeling in West Bengal. As there are no airports or railways in Sikkim, I continue by car. Sikkim is a politically sensitive area as it borders with Tibet Autonomous Region, and is a restricted travel area, thus foreigners need an Inner Line Permit to travel there.  

On entering Sikkim at Rangpo, I must register my arrival at the local government offices. In Rangpo, I visit the local branch and meet the area manager, branch manager and credit officers.  This branch was opened less than one year ago.  I also have the opportunity to meet with clients who have taken loans with RGVN.  These young and older women have established businesses but lack the required working capital to help the business grow.  The majority of the women use the funds to support pig farming, small grocery stores, clothing stores as well as guesthouses.
Highway 31A marks the start of the Himalaya Mountains; from there it is only 90 km to Gangtok, the capital of Sikkim.  The trip is made up of winding roads that need continuous maintenance, as landslides are a frequent occurrence. The 90km journey takes 3 hours to travel. We leave what most people associate with India behind in West Bengal and travel to a place that feels more like Nepal, as there are many Tibetan people living in the area as well.  Nightfall comes early at this time of year.  Traveling at night through the deep valleys of the mountains, you can see lights up along the mountainside.  Each home has only one light, so it is hard to tell where the flicker of light from a home ends and the stars above begin.  I reach Gangtok, a small city with roughly 100 000 people at an altitude of 1600 meters above sea level. 
I wake up to a breathtaking view of Kangchenjunga, the third highest mountain in the world with an elevation of 8,586 m.  The mountain is probably 40km away, but the clear and clean air allows for the great picture.

The main mission behind this trip is to understand the challenges facing the region. After day two, which is dedicated for the RGVN board of directors meeting, I am fortunate enough to spend the entire day three with the company’s Sikkim area manager, Tshering Peki Bhutia (“Peggy”). She is a “Bhutia”, which is a community of people of Tibetan ancestry, but her grandparents and parents stem from Gangtok, the capital of Sikkim.

She joined RGVN two years earlier, having already ten years of work experience in community development, including the development of cooperative societies, linking self-help groups to banks and training individuals to become leaders in the communities. While Peggy shows me the surrounding area and I have an opportunity to ask her about the surrounding area and the work that is being done by the local staff.  She immediately impresses me; she is well educated, articulate, and responds very openly to my questions.   
We drive east and there are military personnel and bases along the road; a reminder that the border crossing to China is very near and is one of only three open border crossings between India and China. We pass along treacherous roads, where the mountain is so steep that I quickly understand the challenges of reaching customers as mentioned earlier by Peggy.  

Even though the area of Sikkim is only 7000 square km, in order to reach the branches furthest away Peggy must often leave her home at 5am. It is a tough job but she enjoys travelling so it makes the work she does easier.  Spending the day with the area manager has solidified my understanding of the challenges of the region, including language differences, cultural differences, the ruralness of Sikkim and the transportation challenges faced by her and the RGVN staff.
I come away with an impression that northeast India faces a unique set of challenges in operating microfinance in this area, but think RGVN should be able to succeed given its focus on providing additional value-added social services to its clients.  It is a region unlike the rest of India.

Nordic Microfinance Initiative AS

Postal address:
P.O Box 1925, Vika, N-0125 Oslo, Norway

Visiting address:
Rosenkrantz' gate 22, 7th Floor, N-0160 Oslo

Telephone: +47 22 36 22 40
Fax: +47 22 42 89 01
E-mail: info@nmimicro.no
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