Janata Bank

Sakchyam Access to Rural Banking

 

 Background

Nepal’s mid and far western regions have thriving, busy towns with plenty of modern facilities. A few kilometres outside these towns however, the region’s 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. Providing access to finance with branchless banking touch points and with financial products and services tailored to these remote communities would truly help unlock opportunities for them and for the service providers.

 

Challenges Faced

During an interaction with locals in mid and far western Nepal, locals demanded banking products and services explaining that due to lack of financial institutions with rural-based banking products and services, people from that locality are highly dependent on informal sources for their financial needs.

Although the presence of government-owned banks was observed in some areas, due to their inefficient services, the required level of efficient mechanisms was yet to be rendered for saving, withdrawal, remittance and most importantly for borrowing besides other banking services to meet overall financial needs.

To cater to the gap illustrated by such a demography observed by Janata Bank’s team in different targeted districts, Sakchyam is supporting Janata Bank Sakchyam Access to Rural Banking to implement 50 branchless banking touch points during the project period in Darchula, Achham, Kailali and Dhangadi districts of Nepal. The bank also plans to lend products like Women Entrepreneur loan, Small & Medium Loan to business/ Enterprises, Agro-based loan, Low cost housing loan, Cattle and livestock farming loan and Bee farming loan etc to the local populace of the above mentioned districts.

 

Sakchyam’s Intervention

Janta Bank with support from Sakchyam will establish 50 branchless banking touch point during the project period and altogether 70 branch less banking touch points in the period of 5 years. Their pricing structure for interest rates on deposits and lending is competitive and pursuant to market forces; fees and commissions shall be competitive and pursuant to regulatory norms; the use of technology will be customer-friendly.

 

Likely Impact

Janata bank will work at VDC level in 5 districts: Darchula, Achham, Kailali and Dang in the Far West and in the Mid-West. Their main target groups are financially underserved/ unserved population in rural area for both literate and illiterate people, and small and medium sized business firms. They aim to provide 1,260 deprived sector and micro lending loans during the project period of 3 years. It aims to provide NPR 292,397K loan during the project period. The bank also aims to provide remittance services to the local people and aims to carry out 46,000+ transaction during the project period.

 

Latest Update on Sakchyam-Janata Bank Partnership

 As of September, Janata have

  • Launched 25 out of 50 BLB touchpoints
  • Opened over 3672 accounts with total deposits of over NRP 72.91 million

Disbursed loan over NPR 64.93 million through BLBs and Sakchyam sourced