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Financial Inclusion Report 2023: Nepal’s Progress Towards Financial Accessibility

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Kathmandu, March 10, 2023 - The latest report on financial inclusion in Nepal reveals that despite a decline in the total number of Banking and Financial Institutions (BFIs), the country has made significant progress in expanding access points and increasing financial services.

Key Findings

  • The total number of BFIs has decreased from 222 in 2015 to 125 as of mid-November 2022.
  • Despite this decline, the number of microfinance institutions (MFIs) has increased, aiming to provide financial access to low-income households, women, and micro and small enterprises.

Financial Access Points

  • As of mid-July 2022, BFIs had opened 11,528 branches in 752 out of 753 local levels.
  • The number of ATMs has expanded from 1,985 in mid-July 2017 to 4,602 in mid-July 2022, an increase of 131% over five years.

Distribution of Financial Access Points

  • Rural municipalities have roughly 16% of the total branches.
  • Sub-metropolitan and metropolitan cities account for the rest.
  • 20.35% of the population uses ATMs, with 22.47% being male and 16.53% female.

Microfinance Institutions (MFIs)

  • As of mid-July 2022, the total number of MFI members reached 5.93 million, an increase of 213% from 2016.
  • The total savings membership increased by 233%, and the total number of borrowers saw a 264% increase.

Financial Cooperatives

  • According to the economic survey 2022, there were around 30,879 cooperatives operating in Nepal with over 7.3 million members.

Challenges Ahead

  • While progress has been made in expanding financial services, there is still a disparity in access to quality financial services between rural and urban areas.

Recommendations

  • Policymakers should prioritize expanding financial services to rural areas.
  • Promote the use of digital channels for financial transactions.
  • Enhance financial literacy among the population.

Figures

  • FIGURE 1: Number of branches of BFIs in each province (2022)
  • FIGURE 2: Number of ATMs in Nepal (2017-2022)

Contact

For more information or to schedule an interview with the author, please contact [Name], [Email], [Phone number].