KATHMANDU, April 2: Digital financial services are revolutionizing the financial landscape in Nepal, driving financial inclusion and economic growth, according to a flagship report launched by International Finance Corporation (IFC) and Nepal Rastra Bank (NRB).
According to a press statement issued by the IFC, the report highlights significant progress in expanding digital financial services in Nepal through two key projects: Access to Financial Services, supported by the governments of Japan & the United Kingdom, and Digital Financial Services in Nepal, backed by the Government of Korea. It also highlights key milestones, including the successful implementation of the National Payment System Development Strategy (NPSDS), Retail Payment Strategy, and the growth of digital payment platforms that have facilitated efficient electronic payment transactions, particularly in underserved communities.
"Digital finance is a dynamic and rapidly evolving field. This report provides financial institutions and regulators with an overview of digital finance developments, plus insights that could help promote a healthy and sustainable digitalization journey for Nepal's financial services industry," said Gregory Smith, IFC Manager for South Asia. "Our goal, in partnership with NRB, is to strengthen the digital financial ecosystem, enhancing access to finance and driving economic growth for all," the statement reads.
NRB and IFC join hands to strengthen Nepal’s fintech ecosystem
The statement states, “Over the past decade, Nepal has witnessed advancements in financial technology, driven by rapid internet penetration, technological innovation, and the increasing adoption of electronic payments. These developments are reshaping the financial landscape, creating new opportunities for both businesses and individuals. For instance, a comparison of figures from the final months of fiscal years FY 2019/20 and FY 2021/22 shows that digital payments increased by 125 percent, rising from Rs 2.8 trillion (USD 21 billion) to Rs 6.2 trillion (USD 47 billion).”
"Digital financial services offer tremendous potential for enabling financial inclusion, reducing costs, and improving efficiency. Our longstanding partnership with IFC will help bring these essential services to more people, directly and through partnerships with administrations and the private sector to create a more equitable financial future for all Nepalis." said Maha Prasad Adhikari, Governor, NRB.
The report stressed significant progress in digital financial services and identified opportunities for growth, including increased investment in digital infrastructure, financial literacy, and cybersecurity. These advancements will ensure that every citizen can confidently engage and benefit from the use of digital financial services, according to the statement.