The Western regions of Nepal,1 unlike their Central and Eastern counterparts, are characterised by low population density and high incidence of poverty. The Western regions comprise 45 percent of the total population of Nepal, though they constitute 62 percent of the total geographical area of the country. The Mid-Western and Far-Western regions have the highest incidence of poverty, with some 45 percent of households classified as poor.

Offering limited economic opportunities to their people, the Western regions have farming and small businesses as the primary income-generating activities for most inhabitants. A number of people also migrate to other parts of Nepal and abroad for work.

This report looks at the Western regions as a distinct geography with a specific set of financial needs. Three prospective customer segments for digital financial services (DFS) are identified for the Western regions in the report: farmers (with mostly small landholdings), small business owners and domestic/foreign migrants.