By Nara Hari Dhakal, published on the Microfinance Gateway; 2011; 8 pages; available at
http://www.microfinancegateway.org/p/site/m/template.rc/1.9.52121?cid=PS…
This document gives an overview of efforts by the Nepalese government to promote financial inclusion, explores the opportunities and challenges associated with such inclusion and recommends measures for policymakers and financial service providers to expand inclusion. Using secondary sources, the author evaluates the outreach of various financial services and assesses the market size for those services. Approximately 1.2 million poor people are estimated to have access to financial services “with outreached skewed in the accessible areas with negligible or no access to financial services in remote areas.”
The paper finds that although ensuring financial inclusion is a difficult task, Nepal has made significant progress in this area. However, the sustainability of this progress is a challenge as it requires a broad approach, covering strategies for awareness building, better money-management education, debt counseling, savings mobilization, affordable credit services and research and development. To expand outreach, the author argues for combining different lending methods such as group lending and individual lending, applying market-led approaches to new product development, fostering linkages with local communities and promoting the use of technology.
Mr Dhakal further recommends that government agencies and financial service providers should reshape their policies and strategies to focus on financial inclusion. In order to ensure a vibrant financial sector in Nepal, the author advocates for conducting access surveys connecting clients to both financial and non-financial service providers; streamlining the operations of financial cooperatives; developing the capacity of financial service providers; developing new products; and executing the diversification and channeling of available resources, technology and expertise towards financial inclusion.
By Ashim Kar, Research Associate
Sources and Additional Resources:
MicroCapital.org story, July 9, 2011: “MICROCAPITAL BRIEF: International Finance Corporation (IFC), Microsave Publish Deposit Assessment Reports for Bangladesh, India, Nepal and Sri Lanka”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-microsave-publish-deposit-assessment-reports-for-bangladesh-india-nepal-and-sri-lanka/
MicroCapital.org story, April 7, 2011: “MICROCAPITAL BRIEF: United States Agency for International Development (USAID) Announces Launch of $30m Nepal Economic, Agriculture and Trade (NEAT) Project, Which Will Include Support for Microfinance”, https://www.microcapital.org/microcapital-brief-united-states-agency-for-…
MicroCapital.org story, March 15, 2011: “MICROCAPITAL BRIEF: Rural Microfinance Development Centre (RMDC) Offers Seed Funding to Expand Microcredit into Remote Regions of Nepal”, https://www.microcapital.org/microcapital-brief-rural-microfinance-develo…
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