In Sugarkhal of Kailali District, 30-year-old Ishwori Pokharel, starts her morning at 4:30 am and her daily routine would include household chores which would conclude only in the evenings. But this changed after her husband got the branchless banking (BLB) agent license from Global IME Bank Limited (GIBL). Ishwori’s husband, Krishna Prasad Jaishi, works on a fixed pay plus commission as a BLB agent for GIBL. Now, Ishwori is a secondary agent for GIBL in the Sugarkhal BLB touch point and she performs transactions on behalf of the bank in the absence of her husband who is a teacher in the local school.
Using a Point of Service (POS) machine provided by GIBL, Krishna and Ishwori have, in the first 10 months itself, opened above 112 accounts and delivered regular salary payments and pensions to many people living along the hill sides. They have also been able to collect deposits of above NPR 819,000 on behalf of the Bank. Additionally, this has resulted in empowering Ishwori. “I never thought I would be able to use a POS machine,” she says. “My husband is really happy to see me confidently perform transactions and I feel good that I am able to support him in his work,” Ishwori says with a smile.
GIBL at the right time took the first mover’s advantage by appointing 10 BLB agents and establishing 3 extension counters in the rural hills of the Mid and Far Western Development Regions (MFWDR) of Nepal (Baitadi, Dadeldhura and Kailali), with UKaid Sakchyam – Access to Finance Programme’s (Sakchyam) support. In MFWDR, people who are involved in stable income generating activities have no saving opportunities and are compelled to receive remittance money from informal agents like local traders and merchants who carry cash on behalf of the money senders. This is often very risky and also costly as they charge high rates of commission.
The extension counters and BLB touchpoints established by GIBL with Sakchyam’s support have helped rural people of MFWDR residing in the high hills to get the basic banking services at their door steps. People are able to receive remittance money in their own bank account directly from their dear ones and are also able to save the amount with attractive interest rates. However, before the establishment of extension counters and BLB touchpoints, the money-receivers used to receive the remittance money from informal agents which would mean that often, relatives and friends would come to know about it. Consequently, they would make request for loans and the receivers would, unwillingly, have to lend to them rather than focusing on their own financial needs. But now the receivers are happy that they receive the money directly in their bank accounts without anyone else’s knowledge.
Due to Sakchyam’s intervention, locals of these areas have access to financial products and services and also enjoy better prices for their products from the Bank. The Bank has disbursed above NPR 27 million in loans and collected above NPR 162 million in deposits. The Bank has also managed to reach more than 11,300 customers, well beyond the initially set target of 9,200 customers for the project period. The Bank has also been able to make payments of above NPR 82 million in Government to People (G2P) payments through its Sakchyam-supported banking outlets. The local beneficiaries, including women, disadvantaged groups, and youths, are 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 has ensured that the Banks is able to increase services to the under-banked 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.
By Rukmani Maharjan, Sakchyam – Access to Finance Programme