(A partnership between UKaid Sakchyam and Nepal Investment Bank Ltd)

Background

Access to financial services is a basic necessity for all today, whether it’s for a trader in an urban hub or for a farmer in a rural village. Especially for rural poor communities, ease of access to suitable financial products and services can enable members of the community to take advantage of available economic opportunities and lift themselves out of poverty. This results in increase in income and overall improvement in livelihoods.

Challenges

In the rural areas of mid- and far-western Nepal, there are many local community-based institutions. Many times, such institutions – mostly cooperatives – lack the institutional capacity to scale up their operations and provide efficient and effective services to the community. For the targeted population, having easy and ubiquitous access to funds as well as communication with the agents of the financial institution at any time and from anywhere is important. This assures the beneficiaries in the community of the safety and accessibility of their money.

Sakchyam’s Intervention

Through its partnership with UKaid Sakchyam Access to Finance Programme (Sakchyam), Nepal Investment Bank Limited (NIBL) aimed to increase the local people’s trust in formal financial channels and encourage them to adopt it to become more financially capable. With Sakchyam’s support, NIBL aimed to establish 28 branchless banking (BLB) touch points in Achham, Baitadi, Bajhang, Dadeldhura, Darchula and Doti. The proposed financial solution planned to incorporate a debit card, which can be used with all National Payment Network (NPN – NIBL’s proprietary card network) enabled Automated Teller Machine (ATM) and Point of Sale (POS) machines. With the debit card, beneficiaries can carry out various financial transactions through their BLB agent points on a real-time basis by using their fingerprint and PIN for top-up authentication. Each BLB Agent will be provided with a tablet device to carry out financial transactions. The device will support BLB transactions (Cash in/out, Fund transfer, Bill payments, top-ups etc.) and also mobile POS (mPOS) transactions enabling the same BLB agent to also work as a Mobile Banking Agent. Customers will be able to make transactions through any BLB location within Nepal. The distributed card is also leveraged as a NPN which can be used freely within NIBL network with a nominal fee.

Impact

With Sakchyam’s support, NIBL aimed to bring more than 14,000 beneficiaries into the formal financial system. The project will facilitate lending of GBP 1.9 million to more than 16,500 beneficiaries during the project period. Such improved access to finance is expected to improve the financial status of the communities in target districts and improve the livelihoods of the beneficiaries.

As of December 2018, with Sakchyam’s support, NIBL has launched all the four planned physical branches in Doti, Achham, Kalikot and Dailekh. The bank has also launched 14 BLB touchpoints in Achham, Baitadi, Bajhang, Banke, Dadeldhura, Darchula and Doti and collectively, these banking outlets have opened over 13,000 accounts, mobilized deposits of over NPR 237 Million and disbursed loans over NPR 31 Million.