61 % people in Nepal have access to finance

By Laxman Kafle

Kathmandu, Nov. 14

Nepali people’s access to finance has increased significantly over the years, thanks to the financial literacy campaign launched by the Nepal Rastra Bank and other banks and financial institutions.

Around 61 per cent people have at least a deposit account in the banks and financial institutions.

According to Dr. Gunakar Bhatta, executive director of Nepal Rastra Bank, a large number of people are also enjoying financial services provided by the microfinance and savings and credit cooperatives. However, access to the services provided by the latter two are not counted in it.

"Establishment of more banks and financial institutions and expansion of their branches across the country led to the increase in people’s access to finance.

The government campaign ‘one person one bank account’ and the compulsion to have a bank account to receive the social security allowances have also helped increase people’s access to finance," Bhatta told The Rising Nepal.

According to the latest report of NRB, the number of deposit accounts has reached 27.8 million by mid-July 2019, which is around 94.1 per cent of the total population of the country.

However, there are duplications of account holders as one may have more than one accounts in different banks, he said.

Around only 18 million people have their personal bank account in the BFIs if the duplication of the bank accounts is reduced, the report said.

Based on the real bank account holders, around 61 per cent people have access to finance, Dr. Bhatta said.

Likewise, the number of loan accounts in the banks and financial institutions reached 1.44 million by mid-July 2019 from 1.096 million in 2015/16.

The number of mobile users reached 8,347,000 and debit card users 6.7 million.

The rapid rise in the bank accounts shows that the access of people to the banking service is increasing, he said.

The report said that around 89 per cent population of the urban areas and 27 per cent rural people can reach the commercial bank branches on foot within 30 minutes.

Around 75 per cent people of the Terai, 45 per cent of the hilly area and 17 per cent mountainous area can reach the commercial bank's branch in one hour’s walk.

An average time to reach a branch of a commercial bank in the urban areas is 16 minutes and in the rural area 135 minutes, the report said.

The survey showed that only around 20 per cent households are taking loans from the banks and financial institutions.

Due to the policy of the government to open branch of at least one commercial bank in each 753 local levels, the trend of opening bank branches has been on the rise and it has enhanced the access of people to the bank.

Of the total 753 local levels, 742 have at least one branch of the commercial bank as of mid-October 2019.

The State 5 is the first State to get branches of commercial banks in all local levels.

Likewise, the number of BFIs licensed by NRB increased to 168 by mid-September 2019 and they are providing banking services from their 8,970 branches.

The number of population per branch declined to 3,363 by the end of last fiscal year from 4,334 by the end of 2017/18. 

Chief Executive Officer of the Agricultural Development Bank Anil Kumar Upadhyay said that the country’s economy will boost after savings increase in the banks.

The people having a bank account will be encouraged to save more money to start a business as per his/her capacity.

He said that the activities to expand the bank branches have increased rapidly for the last one year which had never happened in the past.

Recently launched national campaign to open bank accounts of all Nepalis will play a crucial to bring all people into the banking net, Upadyaya said.