With private commercial banks highly concentrated in urban areas, non-banking financial institutions such as micro finance financial institutions (MFFIs) along with licensed cooperatives and financial nongovernmental organizations (FINGOs) are increasing their foothold in rural areas of the country.
Despite various initiatives of the government to increase peoples’ access to finance, majority of the population still do not have access to financial services. According to the data of Nepal Rastra Bank, a total of 721 branch offices of commercial banks, 818 of development banks and 239 of finance companies are in operation in different parts of the country. Each bank has average client base of 7,724.
According to Financial Stability Report 2014 prepared by the central bank, BFIs are currently serving 12,131,298 depositors and 884,536 borrowers across the country as at mid-January 2014. Similarly, only 59 branches, out of 1,508 branches of commercial banks, were present in 17 least-banked districts and the presence of BFIs, except for state-owned banks, is nearly nil in nine least-banked districts.
NRB has said the concentration of BFIs in urban areas was a matter of big concern. “Remote areas remain very poorly-served by formal financial institutions compared to urban areas,” the report said. “The presence of private sector banks in remote areas is minimal despite of the continuous efforts from the NRB to increase financial inclusion.”
While the presence of commercial banks has remained largely low in remote areas, MFFIs, cooperatives and FINGOs are doing their bi to provide financial services to people in remote areas. At present there are 35 MMFIs in the country and they have altogether 776 branch offices. Similarly, there are 30 financial intermediary FINGOs in the country with altogether 282 branch offices operating throughout the country.
FINGOs are registered under the Institutions Registration Act, 1977 and they are allowed to conduct limited banking activities with the permission of NRB and in accordance with the provision of the Financial Intermediary Act, 1999. They have mobilized Rs 2.44 billion in deposits, and issued Rs 4.29 billion loans so far.
Similarly, a total of 30,087 cooperatives are operating in Nepal. Around 43.1 percent (12,961) of them undertake saving and credit activities (SCCs), while 24.6 percent (7,385) of them are agriculture cooperatives. Likewise, 13.6 percent (4,103) are multi-purpose cooperatives and the rest focus on other activities.
“MFFIs, cooperatives and FINGOs, among other non banking financial institutions, are playing a significant role to increase people’s access to finance. Recognizing their contribution, we have made arrangement to channel deprived sector lending through them,” NRB spokesperson Manmohan Kumar Shrestha, told Republica. “There, however, is duplication of some services. We are doing the needful to overcome such problems.”
source: republica,27 sept 2014
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Despite various initiatives of the government to increase peoples’ access to finance, majority of the population still do not have access to financial services. According to the data of Nepal Rastra Bank, a total of 721 branch offices of commercial banks, 818 of development banks and 239 of finance companies are in operation in different parts of the country. Each bank has average client base of 7,724.
According to Financial Stability Report 2014 prepared by the central bank, BFIs are currently serving 12,131,298 depositors and 884,536 borrowers across the country as at mid-January 2014. Similarly, only 59 branches, out of 1,508 branches of commercial banks, were present in 17 least-banked districts and the presence of BFIs, except for state-owned banks, is nearly nil in nine least-banked districts.
NRB has said the concentration of BFIs in urban areas was a matter of big concern. “Remote areas remain very poorly-served by formal financial institutions compared to urban areas,” the report said. “The presence of private sector banks in remote areas is minimal despite of the continuous efforts from the NRB to increase financial inclusion.”
While the presence of commercial banks has remained largely low in remote areas, MFFIs, cooperatives and FINGOs are doing their bi to provide financial services to people in remote areas. At present there are 35 MMFIs in the country and they have altogether 776 branch offices. Similarly, there are 30 financial intermediary FINGOs in the country with altogether 282 branch offices operating throughout the country.
FINGOs are registered under the Institutions Registration Act, 1977 and they are allowed to conduct limited banking activities with the permission of NRB and in accordance with the provision of the Financial Intermediary Act, 1999. They have mobilized Rs 2.44 billion in deposits, and issued Rs 4.29 billion loans so far.
Similarly, a total of 30,087 cooperatives are operating in Nepal. Around 43.1 percent (12,961) of them undertake saving and credit activities (SCCs), while 24.6 percent (7,385) of them are agriculture cooperatives. Likewise, 13.6 percent (4,103) are multi-purpose cooperatives and the rest focus on other activities.
“MFFIs, cooperatives and FINGOs, among other non banking financial institutions, are playing a significant role to increase people’s access to finance. Recognizing their contribution, we have made arrangement to channel deprived sector lending through them,” NRB spokesperson Manmohan Kumar Shrestha, told Republica. “There, however, is duplication of some services. We are doing the needful to overcome such problems.”
source: republica,27 sept 2014
LINK
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