Nepal Rastra Bank, the United Nations Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) jointly launched the findings from the demand side survey on financial inclusion. The findings were released in a national conference which was inaugurated by Honorable Dr. Ram Sharan Mahat, Minister, Ministry of Finance along with Honorable Dr. Govind Raj Pokhrel, Vice Chairperson of the National Planning Commission, Dr. Chiranjibi Nepal, Governor of the Nepal Rastra Bank and Respected First Secretary of Embassy of Denmark, Ms. Ingrid Dahl Madsen.
Conducted in late 2014, the survey was a 4,014 sample of the adult population in Nepal, aged 18 years and above, across 70 districts covering the terrain, hills and mountain ecological terrains. The survey was designed using the globally recognized FinScope methodology by FinMark Trust, and implemented by the Interdisciplinary Analysts (IDA) Nepal.
The key findings of the survey reveal 61% percent of Nepalese adults are formally financially included. The survey findings show that men have higher levels of banking and are more financially included compared to women in Nepal, as well as higher levels of education as well as personal monthly income.
The survey also reveals that 57% of Nepalese adults claim to save and 45% claim to borrow money. The Money lenders in Nepal feature highest as a source of formal credit.
The FinScope survey is the initial findings of UNCDF’s Making Access to Finance Possible (MAP) Programme in Nepal. The survey data will be overlaid with a detailed analysis of the supply and regulatory environment in order to understand the drivers and barriers to the increase update of financial services. These outputs will be used to inform the roadmap priority areas and action plan for increasing financial inclusion for Nepal.
Dr. Binod Atreya, National Project Director and Executive Director of Nepal Rastra Bank welcomed the delegates and looked forward to further results emanating from the MAP process in Nepal. He explained that following the completion of the MAP diagnostic results, a roadmap would be prepared to assist the Government of Nepal in developing policies and setting out top priorities for promoting financial inclusion in the short, medium and long- term for Nepal.
Delivering the opening remarks, Honorable Minister, Dr. Ram Sharan Mahat, Ministry of Finance shared recollections of his engagement with UNCDF in Nepal during previous projects for infrastructure and market development. He emphasized the need for banks to penetrate and spread in the rural areas and reverse the current practice by bank and financial institutions of providing financial services.
While Dr. Govind Raj Pokhrel, Vice Chairperson, National Planning Commission highlighted that “the availability of new information on the financial behavior of households and individuals such as this one would assist in removing the causes of financial exclusion, while addressing different ways of measuring poverty and inequality.”
Dr. Chiranjibi Nepal, Governor of NRB highlighted the importance of taking the financial inclusion agenda forward stating that “Financial inclusion is not only a choice but also a necessity for economic growth of Nepal.” He noted that strong coordination mechanism between banking, insurance and non-bank financial intuitions along with private sector player is required to achieve universal financial access goals. Dr. Nepal reaffirmed the need for inclusive growth policy for Nepal, for which NRB in coordination with the government of Nepal, has already taken a number of policy measures to ensure reliable and affordable financial services to the poor people in the country.
Ms. Ingrid Dahl Madsen, First Secretary, Embassy of Denmark stated that the Government of Denmark has placed great emphasis on the issue of Access to Finance in its development programmes in Nepal and remarked that Financial Inclusion is a key pillar for inclusive growth and essential for improving the living standards for the people of Nepal.
While addressing the participants, Mr. Renaud Meyer, in his vote of thanks, reiterated the importance of access to finance for successful poverty reduction and on the use of innovations such as mobile banking and other commercially viable pro poor products. Mr. Mayer expressed the commitment of UNDP and UNCDF to work closely with NRB and other relevant stakeholders to promote the financial inclusion agenda in Nepal.
The Conference included a substantial gathering of senior officials from the Government of Nepal, Nepal Rastra Bank, Financial Institutions, Remittance and Insurance companies, private sector entities, academics, donors and development partners and representatives from various media houses. Additionally, the conference also brought in international experts from Alliance for Financial Inclusion and UNCDF.
The objective of the Conference was to present the levels of financial inclusion and the access to financial products and services in Nepal – both formal and informal as well as to present the drivers of as well as barriers to financial access. Through the Conference, evidence based dialogue was stimulated during a panel discussion chaired by the Deputy Governor of the Nepal Rastra Bank, representatives from Nepal Bankers Association, Central Bureau of Statistics, Federation of Nepalese Chamber of Commerce and Industries including experts from the Alliance of Financial Inclusion and UNCDF, where the panel members expressed their views on financial inclusion in Nepal.
The Making Access to Finance Possible (MAP) framework has been developed by UNCDF in partnership with FinMark Trust and Centre for Financial Regulation and Inclusion (Cenfri). The study in Nepal has been funded by UNCDF, UK Aid and Government of Denmark. The MAP process has been overseen by a National Steering Committee chaired by the Nepal Rastra Bank, with representation from the Central Bureau of Statistics, Ministry of Finance, UK Aid, Government of Denmark, and UNCDF.