KATHMANDU, Jan 31: The government has set a target to increase the financial sector’s contribution to the national economy by 0.85 percentage points to 7.5 percent of the country’s gross domestic product (GDP) over the next five years, at a time when many players in the sector are struggling to expand their businesses.
According to the Ministry of Finance (MoF), the financial sector currently contributes 6.65 percent to GDP. Unveiling the Second Financial Sector Development Strategy (2025/26–2029/30), the MoF said the target will be pursued by steering the sector toward a sustainable, inclusive and progressive path to support overall economic prosperity.
The strategy aims to develop a capable and efficient financial sector to promote sustainable and inclusive economic growth. “Its key objectives include making the financial system safe, strong, reliable and stable; strengthening good governance through greater transparency and accountability; expanding environmentally and technology-friendly financial services; and building an inclusive financial system through enhanced financial literacy, access and customer protection,” the MoF said.
Govt aims to increase the size of GDP to Rs 8.5 trillion in fiv...
The strategy is built on four key pillars. The first focuses on strengthening the real sector by developing financial infrastructure and enhancing institutional capacity to support sustainable and inclusive economic growth.
The second pillar seeks to expand financial access by increasing the reach of banking, insurance and capital market services, particularly in rural areas and among marginalised communities. The third pillar emphasises improving financial literacy and customer protection to promote the prudent use of financial services. The fourth pillar aims to enhance public trust in the financial system to ensure long-term stability of the sector.
Under the strategy, agricultural lending is targeted to rise to 15 percent from the current 12.84 percent within five years. Similarly, the volume of electronic transactions—through mobile banking, internet banking, digital wallets and QR code payments—is expected to increase by up to threefold from current levels.
The strategy also includes plans to develop and publish financial access indicators annually, mobilise financial resources through specialised instruments such as green bonds, and implement Unstructured Supplementary Service Data (USSD) technology to expand electronic payment services.
Other targets include extending insurance coverage to 60 percent of the population, establishing an effective regulatory and supervisory mechanism for savings and credit cooperatives, introducing new financial instruments—such as equity derivatives, index funds and exchange-traded funds (ETFs)—in the capital market, and launching a commodity exchange.
The MoF said arrangements have been made for the ministry, the Ministry of Land Management, Cooperatives and Poverty Alleviation, and relevant regulatory bodies to prepare a detailed action plan within two months to implement the strategy. The action plan will outline specific tasks, timelines, implementing agencies, priorities and key performance indicators, along with a regular monitoring and reporting mechanism with clearly defined responsibilities.
