World Bank approves $80 million to strengthen financial sector

Washington / May 7: The World Bank’s Board of Executive Directors has approved an $80 million development policy credit for Nepal to strengthen the stability of its financial sector, diversify financial solutions, and enhance access to financial services.

The third Finance for Growth Development Policy Credit aims to improve the functionality of Nepal’s financial sector, promoting private sector-led growth. The initiative will ramp up supervision in Nepal’s banking and insurance sectors and foster innovations in financial products within capital, insurance, and disaster risk markets. Additionally, it will promote financial inclusion through digitalization, bolster credit infrastructure, and enhance financial literacy, with a particular focus on empowering women entrepreneurs.

“This project supports Nepal’s green, resilient, and inclusive development and will help create an enabling environment for private investment to contribute to Nepal’s economic growth, particularly benefiting the poor and vulnerable,” said Faris Hadad-Zervos, World Bank’s Country Director for the Maldives, Nepal, and Sri Lanka.

Furthermore, the initiative supports Nepal’s climate agenda by mandating disclosures of climate-related risks and impacts within the banking sector portfolio, introducing risk-informed pricing for insurance products, including climate risks, establishing a framework for issuing green bonds, and integrating climate-related mitigation and adaptation commitments into credit guarantee products.