Mega BankSeptember 17, 2015
Mega Bank’s Mega Aarthik Sakchyam
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. Branching out 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 from Alital VDC, Dadeldhura in 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 Mega Bank’s team in different targeted districts, Sakchyam is supporting Mega Bank’s Mega Arthik Sakchyam Programme to implement Micro, SME & Mid-Corporate Banking through branches, branchless banking and alternate channels from the priority districts and VDCs like Alital. Currently people from Alital and other VDCs of targeted districts have to travel more than 50km to district headquarters to access banking services. Due to this only few people (with good net worth) have access to finance in these localities.
Sakchyam’s Intervention Mega Bank with support from Sakchyam will establish 4 new branches and 30 new branchless banking touchpoints; and will introduce the concept of “Tab Banking” providing real time mobile financial services through the use of Tablets. 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. The technology is provided by leading software companies such as F1 Soft. As the number of people per branch is higher than the national average here, the target beneficiaries will have better access to financial services and products.
Likely Impact Mega bank will work at VDC level in 6 districts: Achham, Baitadi, Dadeldhura, and Kailali in the Far West; and Dang and Salyan 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 benefit over 7000 households, 150 MSMEs/ Mid Corporate Businesses: of which the target will be 5,000 poor, 9,000 women, and 3,500 from Disadvantaged Groups. The number of households covered per branchless bank is 230 with one VDC partially/ fully covered by each branchless banking touchpoint. There will be 14,500 clients benefiting from Micro Banking. Mega aims to make over NPR 400 Million loan capital available to these target groups.