The World Bank has approved an $80 million development policy credit for Nepal to enhance the stability of the financial sector and increase access to financial services. The Finance for Growth Development Policy Credit aims to strengthen supervision in the banking and insurance sectors, promote financial product innovations, and boost financial inclusion through digitalization and improved infrastructure.
Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka, highlighted the project’s support for Nepal’s green, resilient, and inclusive development. The initiative aims to create an environment conducive to private investment, particularly benefiting the poor and vulnerable populations. Additionally, the operation aligns with Nepal’s climate agenda by enhancing supervision of climate risks, introducing risk-informed pricing for insurance products, and integrating climate-related commitments into credit guarantee products.
Tatsiana Kliatskova, World Bank task team leader for the project, emphasized the importance of the reforms in banking, insurance, and capital markets to promote private sector-led growth. These reforms are crucial for the sector’s resilience and its role in mobilizing private capital.
Overall, the approval of the development policy credit signifies a significant step towards strengthening Nepal’s financial sector and promoting sustainable economic growth. The project’s focus on financial inclusion, innovation, and climate resilience underscores the World Bank’s commitment to supporting Nepal’s development goals.