The promise of digital banking for Nepal’s remote areas


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Rural maintenance workers engaged in culvert maintenance at Parsa District. Credit: World Bank

On a fine Tuesday morning Roghan Devi, a routine road maintenance worker from Dhanusha district visits the local branch of Mega Bank - a commercial bank in Nepal, to receive her monthly salary. She was notified about this through a text message in her mobile phone. Just a few years back, it was unimaginable for her, and for most of the women from her community, to have a personal bank account.
This initiative is part of a World Bank-supported Strengthening National Rural Transport Program (SNRTP) project that works in 33 districts employing over 1,800 routine maintenance workers- over 70% of them are women - to enhance the availability and reliability of transport connectivity for rural communities. To support this initiative, SNRTP forged a joint collaboration with the private sector. 

Providing access to financial services in Nepal’s remote areas
As part of the collaboration, the government partnered with one of the largest commercial banks in Nepal. In order to ensure transparency, reduce fiduciary risks, foster good governance and improve service delivery, the collaboration entailed making salary payments to the routine maintenance workers to their individual bank accounts instead of traditional way of cash payment. This has, thus, contributed to strengthening financial inclusion of people in remote areas where they previously had no such access to formal financial services. 

Rural maintenance workers withdrawing money from the ATM in Dhading district. Credit: World Bank

The initiative also includes providing credit linkages for income generating activities to micro and small entrepreneurs, including giving loans at competitive interest rate and with flexible repayment schedules. Similarly, the partnership not only ensures that the members receive financial products free of cost, but the bank has also donated maintenance work wears such as reflective jackets for the workers. Building on this, capacity-building trainings to the workers for improving financial literacy and enhancing livelihood opportunities is also being provided.
“Earlier, I hadn't even entered the premises of any bank. Having a personal bank account was something I could never think of. Now, I’m able to make savings and use it for my children’s education and to cover for the essential needs of my family,” explains Roghan Devi. The rural maintenance workers who previously didn’t have knowledge, information or access to financial institutions now have a bank account, receive their monthly payments in their individual accounts, have access to mobile banking system and also receive entrepreneurship trainings.

Rural maintenance workers receiving monthly salary at the bank in Kaski district. Credit: World Bank

“The collaboration offers a good example of the way public and private sector compliment each other in order to achieve broader social and economic goals," says Ashok Jha, Deputy Program Coordinator, SNRTP.  Public-private collaborations are often a win-win situation for both parties. While the pubic sector can offer policy frameworks, knowledge and resources, private sector can help with financing, and delivering products and services at scale to achieve a public service outcome.  
However, there were some challenges to materialize the collaboration since partnerships of these kinds are often considered as a road less travelled in Nepal. Shailendra Kumar Jha, National Programme Coordinator at the International Labour Organization (ILO) that has been providing technical support to the overall maintenance management of the project says, “Many banks were approached initially to be a part of this project but they were not able to assist us with our requirements such as opening account with zero balance, taking no service charge, and providing services to all 33 districts for over 1800 maintenance workers.” 
When quizzed about the objective behind Mega Bank’s involvement, Anil Keshary Shah, Chief Executive Officer of Mega Bank explained, “We consider this opportunity as more than just a Corporate Social Responsibility. While this has provided us a platform to serve people from marginalized background in remote areas, it has also allowed us to reach a large number of clients which could be beneficial to the bank in the longer run to expand banking services in rural areas.”
Public-private partnerships hold great promise, especially in a resource restrained country like Nepal, and this initiation is a good example to showcase the way resources, knowledge and technical expertise of both actors can be capitalized to achieve an outcome of larger public good.


Farhad Ahmed

Senior Transport Specialist

Join the Conversation

K. Joshi
July 06, 2016

Initiatives embracing newest technological trends undoubtedly have a tremendous impact.
Thanks for enriching my knowledge, Farhad Ahmad

Per Helmersen
July 07, 2016

I hope someone recognizes the need for a proper longitudinal impact study documenting the effects of these services at the individual, community and national level and that this ‘someone’ also includes a proper baseline study before implementation – too often an afterthought. Enlist the services of a reputable research institution with experience from both emerging economies and microfinance.

Kaji Awaley
November 27, 2018

Agreed. Longitudinal impact study is the best mirror to see the clear picture of the effect of project.

Basanta Kumar Dhakal
April 09, 2018

What an awesome and thought-provoking article. Kudos World Bank and Mega Bank for taking this initiative to take banking service to the rural population.
Definitely, Digital Banking has helped bring access to financial services to the unbanked population of Nepal who previously had no such access to formal financial services.
Now, the need is to encourage government employees who receive their salaries in bank accounts use digital financial services instead of cashing out. This way, the hassles of cash can be resolved.
As we can see, almost all of the commercial banks in Nepal are urban-centric. It’s high time banks start serving people from the marginalized background in remote areas too. They need to expand banking services in rural areas.
Banking penetration in Nepal is just 60% while mobile penetration is over 135%, and internet penetration too has crossed 50% recently.
Not only internet banking, Digital Wallets like, eSewa, and IME pay are rapidly expanding and helping make mobile payment very easier.
Recently, Former Governor of Nepal Rastra Bank, Yubraj Khatiwada has been appointed as the Minister for Finance, Government of Nepal. This, I think, paves for development of digital finance in Nepal in a more rapid pace.
Let’s be optimistic for the brighter future for access to finance and financial inclusion in Nepal.

e banking
January 31, 2019

thank you for giving this important information about banking.
e banking