Ensuring access to finance and its usage by every Nepali across Nepal is essential for the country's economic development.

However, Nepal's difficult topography creates numerous challenges. Infrastructure development is slow leading to impaired mobility and access. This has affected various sectors in the country including the financial sector which is further weakened by poor electricity and internet, shortage of equipment, maintenance, and availability of skilled human resource.
In 2015, Nepal Rastra Bank (NRB), the central bank of Nepal had the herculean task of ensuring financial access for its population in the aftermath of a devastating earthquake without visibility on the existing financial access points and a well-diversified network of institutions. NRB's in-house system at the time focused solely on liquidity and stability-related data. It did not have a complete system with monitoring and oversight tools. Due to the lack of geographic information systems (GIS), visualisation tools and standard coding mechanisms, less attention was placed on the financial inclusion sector.

Developing a solution

NRB took on a leadership role and collaborated with UNCDF to develop a system that enabled it to identify areas that require financial services and understand the need and operational scope of financial access points. The system is a Regulatory Technology (RegTech) solution that is built on geographic (spatial) data provided by the banking and financial institutions of Nepal.
The system which is referred as the Nepal Financial Inclusion Portal (NFIP), provides real time information and data to map out a realistic picture of access and usage of financial service points. Some of the portal's core functions measure financial inclusion and generate analytical reports to facilitate data-driven policy intervention. This enables the department to accelerate the approvals for establishing new bank branches.

Launching the portal

A soft launch was made in July of 2017 to gain the buy-in from the industry. This helped to test the portal in a closed environment and track the process of data analysis and other functionalities, such as cross-checking the newly formed geographic boundaries of Nepal.

In September 2018 the NFIP was officially launched in the presence of the Governor and department directors of NRB, CEOs of banking and financial institutions and other stakeholders. After testing the NFIP for over a year (2018-2019), the central bank and financial service providers reduced their data reporting and analyzing time from ten to two working days.

Current standing and way forward

NFIP is presently the core monitoring information system (MIS) for financial inclusion in NRB and most of the data from the licensed institutions are collected through this portal. It has proven to be an indispensable tool for policy makers and financial institutions in supporting their everyday activities. From getting a macro perspective of Nepal's overall financial landscape to identifying the need for financial inclusion at a granular level of local bodies, this portal has the potential to become the backbone of the Nepalese financial sector.

The need for the portal has further increased since its launch resulting in the expansion of its scope and usage. In the long run NRB will need to develop regulatory systems for financial stability related indicators analysis, which is beyond the current system's scope. Focus should be on cross-platform definition, reporting and visualisation of indicators with the data feed from different sources. To that end, the current NFIP will require upgrade and further development.

The success of the NFIP and the partnership with UNCDF, led to the development of similar solutions in other countries. For instance, the Bank of Zambia started the development of its RegTech solution by leveraging the learnings from the NFIP.

To learn more about the NFIP read the case study here.