World Bank’s $200 million support to strengthen Nepal’s financial sector to spur COVID-19 resilience and recovery

WASHINGTON, September 17, 2020 – The World Bank approved today a $200 million “Finance for Growth” development policy creditto strengthen financial sector stability, diversify financial solutions, and increase access to financial servicesin support of Nepal’s COVID-19 resilience and recovery efforts.

“In this era of COVID-19, protecting people’s lives is the priority, but giving a boost to economic recovery is equally urgent,” stated Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka. “This project and World Bank support will pave the way for the financial sector and capital and insurance markets to strengthen resilience and more effectively contribute to Nepal’s COVID-19 recovery.”

The “Finance for Growth” operation will supportenhanced supervision of risks confronting the banking and financial institutions, especially in the context of the pandemic’simpacts.The operation will also help build capital, insurance, venture capital and private equity and disaster risk financing markets through regulatory reforms. This will help open new investment opportunities for market actorsand crowd-in private financing.

The other critical area of focus is to expand access to finance for households, women and firms throughregulatory and other reforms that will attract additional inflows of international financeand mobilize digital services, credit infrastructure and literacy programs.

“The project supports the government’s significant reform agenda to enable the financial sector to better respond to the new socio-economic challenges arising from the COVID-19 pandemic. Initiatives to extend access to digital financial services and attractprivate financing to complement thegovernment’s fiscal resources to address disasters are two innovations that will significantly benefithouseholds and women in Nepal,”stated Peter Mousley, Project Task Team Leader of the World Bank.