We Can Work It Out

Samjhana Chaudhary does not want a bank account. The 17-year-old daughter of farmers in Kailali, Far West Nepal is studying in a government run high school and is in search of greater economic opportunity; but a bank account is not part of that plan. She has grown up with stories of local cooperatives fleecing people’s savings, and has a deep distrust of bank accounts and does not believe it is a safe way to store her money. She is also suspicious of the people who offer her interest on savings, largely because she does not know them. Besides, she thinks the process of opening a bank account is strenuous and requires filling many forms.

Women like Samjhana in rural Nepal have limited access to public spaces, national identification documents such as citizenships, and mobile phones as compared to men. This inadvertently has an adverse reaction to the number of bank accounts owned and managed by women. The contrast between female representation when it comes to ownership of bank accounts in urban and rural regions is striking since women in rural regions are affected more by cultural barriers and socio-economic constraints.

All this changed on February 4, 2017. Approximately 14 years after the government owned Nepal Bank closed the only bank branch in Samjhana’s locality due to deteriorating security concerns, a branchless banking touch point was established in Kailali in partnership with DFID Nepal’s Sakchyam Access to Finance for the Poor Programme and Janata bank Limited, a Nepali commercial bank. A visibly excited 34-year-old local shopkeeper, Phoolram Chaudhary, who had recently completed a Branchless Banking Agent Training, was appointed the Branchless Banking agent amidst a function in the village.

Most of the banks in Nepal are clustered in a few major markets. Out of 4,048 village development committees, only 494 locations have a physical bank branch present. In the case of the 14 districts most affected by the April 2015 earthquake, only 101 out of 760 village development committees have a bank branch. Banks haven’t expanded to rural markets given the poor road network and lack of basic infrastructure needed to run a branch viz. electricity, internet, telecommunication, etc.

In partnership with the Central Bank and the Nepalese banking industry, Sakchyam Access to Finance Programme has successfully brought back the focus on the expansion of affordable, formal financial services, especially to the unbanked population in the rural regions of Nepal. Post April 2015 earthquake, the programme opened its Challenge Fund window to reinstate closed branches and to setup new branches/BLB (Biometric Branchless Banking) points in locations where there were no banks present. The window was complemented by Sakchyam’s internal research and rural market intelligence that was made available to the banks to identify feasible sites to setup new points. As a result, 137 points were launched within a span of 6 months across 135 villages, increasing the coverage from 13% to 31%.

At a programme in Kailali to launch the Branchless Banking initiative, a proud and busy Phoolram Chaudhary stood besides his new tablet, giving instructions on how to fill up the account opening forms. As we thanked Phoolram and turned to leave, I enquired about the number of new accounts opened that afternoon. 65 in two hours – replied a beaming Phoolram.

One of the new account belonged to Samjhana Chaudhary.

(Text by Prasanna K.C., Sakchyam – Access to Finance Programme)