KATHMANDU—The Government of Nepal and the World Bank signed a $150 million ‘Finance for Growth’ Development Policy Credit (DPC) today to strengthen financial sector stability, diversify financial solutions, and increase access to financial services in Nepal.
The
agreement was signed by the Finance Secretary, Mr. Madhu Kumar Marasini, on
behalf of the Government of Nepal, and the World Bank Country Director for
Maldives, Nepal, and Sri Lanka, Mr. Faris Hadad-Zervos.
“Our overarching priorities are guided by the objective
of achieving sustainable and inclusive growth as also reflected in the
2022-2026 Financial Sector Development Strategy that addresses emerging
vulnerabilities from COVID-19 and climate change risks, and focuses on digital
payments, and mainstreaming of financial inclusion. The Finance for Growth DPC
contributes to these priorities,” stated Madhu
Kumar Marasini, Finance Secretary.
The
second Finance for Growth operation was approved by the World Bank Board of
Executive Directors on March 24, 2022. The operation will support enhanced
supervision of the banking sector to address financial stability risks in the
context of the COVID-19 pandemic’s impacts. It will help open up capital,
insurance, and disaster risk financing markets, and foster financial product
innovations. It will also support initiatives to increase liquidity and
inclusion through access to external commercial borrowing, financial
digitalization, and financial literacy for women. This will help improve the
functioning of the financial sector to support private sector-led growth.
The
operation supports Nepal’s green, resilient, and inclusive development, and
also initiates a new climate agenda, supporting climate finance resilience
policy measures across different sectors.
“Nepal is one of the early movers in endorsing
green, resilient, and inclusive development (GRID) as a national strategic
development approach,” stated Faris Hadad-Zervos, World Bank Country
Director for Maldives, Nepal, and Sri Lanka. “By supporting a set of transformative financial sector reforms,
including the introduction of a broad-based climate-resilience agenda across
all financial markets, this project will further contribute to the government’s
policy priorities of mitigating the pandemic’s adverse impacts while supporting
a resilient recovery.”
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