First Social Protection Transfer in Nepal

Within the Human Development Social Protection Pilot (HDSPP) project, the first branchless banking payment of scholarship grants was completed during the period of April – June 2014, benefiting 15,000 vulnerable children attending grades 1-8 in public schools. HDSPP is a sub-project supported by UNCDF and the World Bank in the framework of the Government’s Local Governance and Community Development Programme (LGCDP) and it is implemented by the Ministry of Federal Affairs and Local Development (MOFALD) in two far-western districts of Nepal, Kanchanpur and Dhadheldura.

The aim of this UNCDF initiative is to strengthen the capacity and role of central and local governments in delivering social protection cash transfers through branchless banking and, within this context, to reinforce the linkages between the education sector and local government accountability to citizens.

Siddhartha Bank Ltd. (SBL) and MoFALD ensured the disbursement of the first payment of scholarships to 15,000 targeted children belonging to the poorest households, according to the results of a household registration survey conducted in all the 39 Village Development Committees (VDCs) of the two selected districts in the past few months. This payment will enable the beneficiary children to continue going to school.

To ensure the transparency of the disbursement and the overall access to formal financial services in the remote areas, each of the targeted beneficiary children’s guardians was provided with a smart card and a savings account. The guardians are primarily mothers, in whose name the bank accounts have been opened.

Thus, important results obtained by this project have been to deliver for the first time government cash transfers via branchless banking in rural areas through a secured system and to strengthen financial inclusion, offering new and improved access to appropriate and sustainable financial services to vulnerable and marginalized groups.

The recent disbursement is the first of a series of payments to be made by SBL and MoFALD to identified poor children to ensure social protection through branchless banking, enabling vulnerable children to access basic education.