Prabhu Bank

RETAIL BANKING AND BRANCHLESS BANKING IN MANANG, RUKUM AND ACHHAM

Background

Most rural areas of Nepal have small populations scattered over VDCs that are difficult to reach. The absence of financial institutions in those areas has led to people in the area deprived of formal access to finance. Also, the geographic landscape of these areas which is quite challenging further provides challenges to the local population of the area. Most of the population in such area are dependent upon agriculture and most of the youth work abroad as migrant labour.

Challenges Faced

Low presence of formal financial institution has had a negative impact on the daily lives of the local population. The population has to rely on informal money lenders or local financial institutions which charge high interest rate and charges. Also, these rural populations usually lack financial literacy and are therefore unable to make balanced financial decisions.

Sakchyam’s Intervention

With UKaid Sakchyam’s support, Prabhu Bank will establish a total of 3 new branches at Chame of Manang Distict, Rukumkot of Rukum and Kamalbazar of Achham district. Prabhu Bank also plans to establish 15 BLB points in these three districts. These areas have huge potential to develop as commercial hubs. Prabhu Bank will also leverage its experience of working with bottom of the pyramid and will ensure the people living in remote locations have access to funds, especially to invest in productive areas such as agriculture sector and low cost housing.

Likely Impact

The new bank branches and BLBs will cater to the numerous banking needs of the local population. Also, the local women entrepreneurs and farmers will have access to a number of segment-specific financial products that the bank will offer. Agro business firms, Small and Medium Enterprises (SMEs) and Micro, Small and Medium Enterprises (MSMEs) will be able to benefit from existing and new financial products that will be designed to meet specific and seasonal needs; general households will have a trusted financial institution to receive and route their remittance, along with having various saving options. Through the partnership, Prabhu Bank will disburse over NPR 438 million loans and bring in more than 15,000 small deposit account holders into the formal financial system.

As of December 2017, Prabhu Bank has established 3 physical branches and 12 (out of 15) BLB touchpoints. They have reached 2,300 beneficiaries through financial services and disbursed NPR 15.7 million in loans and collected NPR 115 million in deposits.