The financial sector of Nepal is growing steadily, offering financial products and services through its various delivery channels like its branches though its network spread across the country. The challenge now is to address the constraints that exclude certain populations from full participation in the financial system. Even today, large rural populations in the mid and far west of the country lack access to formal financial services as most financial institutions are located in the urban and semi-urban areas because working in rural areas has its geographical difficulties and lack of proper infrastructure.
People in the region are involved in stable income sources from activities like agriculture and remittance income, yet they are compelled to rely upon informal sources and high cost financial sources. Many financial institutions are reluctant to spread its outreach in the mentioned areas due to poor infrastructure, cost, and security among other reasons. With few to none financial institutions in the region, local people are getting left out of the financial system of the country which has a large impact on the local economy of the region.
With Global IME’s innovative Sakchyam Banking Solution through BLB and Extension Counters facility, the idea is to provide financial access to rural communities that are deprived of financial services by expanding the outreach of the bank through alternative delivery channels – Branchless Banking (BLB) service point and Extension counter facilities. Such an innovation will help include more people from this region into the larger financial system.
Due to Sakchyam’s intervention, locals of the area will have access to financial products and services and also enjoy better prices for their products from the Bank. In the duration of the programme, the Bank will disburse NRs. 95.2 million in loans of which 10% of the beneficiaries will be women and 10% will be DAGs. The Bank estimates targeting reaching more than 9200 customers with its product. The success of this intervention will also mean that local people especially Women, DAGs, and Youth will be able to save money for the future and carry out various financial transactions from the outlets – boosting the local economy in the long run. The intervention will ensure Banks will also be able to increase services to the underbanked and develop new products for people in these rural communities. Progress in all these factors means possible replication of this product in other districts in Nepal.
Latest Update on Sakchyam – Global IME Partnership
As of September, 2017 Global IME have