A few kilometres outside the towns in the mid- and far-west regions of Nepal, villages have starkly different environments. Although these villages have immense potential in areas such as agriculture and tourism, access to basic services such as education, healthcare and finance have hindered their progress. Most financial institutions provide services in urban and semi-urban areas, catering to relatively affluent populations. Branching out with financial products and services tailored to these remote communities would truly help unlock opportunities for them and for the service providers.
Due to the absence of formal financial institutions in the remote rural areas, locals avail loans at extortionately high interest rates from the local money lenders who often exploit the inability of the borrowers to repay the loans. Also, the habit of saving and investing in productive activities is found to be severely lacking in such communities.
To cater to the gap illustrated by such a demography observed by Mega Bank’s team in different targeted districts, UKaid Sakchyam is supporting Mega Bank’s ‘Mega Arthik Sakchyam Programme’ to implement Micro, SME & Mid-Corporate Banking through branches, branchless banking (BLB) and alternate channels from the priority districts and VDCs like Alital. Currently people from Alital and other VDCs of targeted districts have to travel more than 50km to district headquarters to access banking services. Due to this, only few people (with good net worth) have access to finance in these localities.
Mega bank has opened its branches and BLBs in Achham, Darchula, Dadeldhura, Salyan, Dang and Kailali Districts in the Mid- West and Far West of Nepal. Their main target groups are financially underserved/ unserved population in rural areas and small and medium sized business firms. They aim to benefit over 7,000 households, 150 MSMEs/Mid Corporate Businesses: of which the target will be 5,000 poor, 9,000 women, and 3,500 from disadvantaged groups. The number of households covered per branchless bank is 230 with one VDC partially/fully covered by each branchless banking touchpoint. There will be 14,500 clients benefiting from Micro Banking. Mega aims to make over NPR 400 Million loan capital available to these target groups.
Mega Bank, in partnership with Sakchyam has established 4 new branches in Safebagar of Achham, Jogbudha of Dadeldhura, Khalanga of Salyan and Khalanga of Darchula and launched 11 out of 30 BLB touch points. The Bank has also introduced “Tab Banking” providing real time mobile financial services through the use of tablets and have also developed tablet based financial literacy modules to rollout in the programme districts. As of December 2017, the bank has opened more than 7,325 accounts with total deposit of over NPR 243 million and loans of over NPR 220.57 million.