One of the biggest challenges to financial inclusion in Nepal, like in many least developed countries, is the lack of physical infrastructure linking low-income people in rural areas to digital platforms. Developing agent networks and other cash-in/cash-out points is one of the critical steps in bridging this access gap. Without access to digital service points, farmers, merchants, teachers, pensioners, etc., who are living in remote areas cannot possibly adopt financial services that would impact their businesses and lives.

Over the years, Nepal has made significant improvements in terms of alternative delivery channels of formal and informal financial services. Nepal Rastra Bank (NRB), the nation’s central bank, has implemented various policies to ensure that financial services make inroads to remote rural areas. Still, financial services are concentrated in urban and semi-urban areas, with the Kathmandu Valley region having the highest concentration. Mapping all financial service points and the areas with the greatest access gaps has become critical to NRB in order to support its interventions to improve financial inclusion across the country.

As a result, NRB—via its Banks & Financial Institutions Regulation Department—decided to upgrade its current reporting system with support from the United Nations Capital Development Fund (UNCDF) programme Mobile Money for the Poor (MM4P). To do so, UNCDF digital finance technical experts hired an app developer to support the design and development of an app called ‘NRB Data Collect.’ The app allows financial institutions to regularly upload their statutory and compliance data together with geo-spatial information of each service point. By automating the data-collection process via the app, the new reporting system will make checking compliance, analysing data and formulating policy more efficient. The pictorial view of financial service points across the country will also allow the Department to prioritize approvals of new bank branches or channel points. Furthermore, the realistic picture of access to and usage of financial services will enable NRB to better track progress in financial inclusion and to make evidence-based decisions that will further stimulate such progress.

The first phase of this initiative involves the development of a dynamic electronic map with geo-tagging of financial transaction points across Nepal. To build this initial map, NRB needs all financial institutions to collect the geo-spatial locations of all branches, ATMs, cash-in/cash-out points, money exchanges, bill payment merchant networks, and remittance agent points (non-financial points), via the newly developed mobile app.

For that purpose, NRB in association with UNCDF organized a soft launch of the app on 21 October 2016 with a small sample of 11 banks and financial institutions of Kathmandu. Following an opening speech by NRB Assistant Deputy Director Tek Nath Pokhrel, the developer—Rooster Logic—introduced the app. Then, through a mock account, all participants had the opportunity to use the app first-hand and get acquainted with geo-tagging. The interactive session helped uncover a number of issues that need to be solved prior to the official launch of the app, which will take place on 12 December 2016. Participants also received the NRB Data Collect App Manual along with the Process Flowchart, and they were asked to share the data-collection process (via the app) with their teams at their respective organizations following the session in order to ensure collection of a first batch of data.

In his closing remarks, Mr. Pokhrel stated, “This is a new chapter in the digital financial service platform of Nepal. With the cooperation of all the participating banking and financial institutions (BFIs), we can make this system a one-of-a-kind arrangement, which will simplify the timely information around data reported by BFIs.”