IFC and Nepal Rastra Bank (NRB) have joined forces to strengthen the fintech ecosystem in Nepal and promote the adoption of electronic payments and innovation in digital financial services. This collaboration is part of the Nepal Digital Financial Services Project, an initiative by NRB and IFC that aims to bolster fintech reforms in the country over the next three years.
According to recent data, there are only 70 registered fintech firms in Nepal, indicating the industry’s early stage of development. Babacar S Faye, IFC’s Country Representative in Nepal, emphasized the need to support a strong fintech ecosystem to attract investments to the sector. He also highlighted the initiative’s alignment with Nepal’s development priorities, including addressing financial inclusion through a combination of investment and advisory initiatives.
The Nepal Financial Inclusion Report 2023 by IFC revealed that while 90 percent of Nepal’s population of 30 million had access to formal financial services, only 29 percent actively engaged in digital payments. This falls behind the South Asian average of 34 percent, as noted in the Global Findex Report 2021. However, the IFC’s A2F 2021-22 survey reported a mobile penetration rate of 94 percent in Nepal, indicating the significant potential for the adoption of digital financial products and services.
The partnership aims to strengthen the digital payments ecosystem by collaborating with key payment service providers and operators, thereby encouraging other digital players in the market. This collaboration highlights both organizations’ commitment to enhancing financial inclusion in Nepal through the use of digital technology.
The initiative seeks to bridge the gap between the high usage of formal financial services and the relatively low engagement in digital payments, ultimately contributing to the overall development of Nepal’s fintech sector.
In a world increasingly reliant on digital financial services, this partnership is crucial in ensuring that Nepal keeps pace with the digital economy. It will provide a much-needed boost to the country’s fintech ecosystem and enable its population to actively participate in the digital economy.
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