World Bank Approves $80 Million Credit for Financial Sector Development in Nepal

The World Bank’s Board of Executive Directors has approved a new $80 million development policy credit for Nepal. This funding is part of the third Finance for Growth Development Policy Credit, aimed at enhancing the stability of the financial sector, diversifying financial solutions, and increasing access to financial services.

This initiative seeks to strengthen the supervision of banking and insurance sectors, promote innovation in financial products, and improve financial inclusion with a focus on digital solutions and literacy—especially for women entrepreneurs.

Faris Hadad-Zervos, the World Bank Country Director for Maldives, Nepal, and Sri Lanka, highlighted that this project is integral to Nepal’s green, resilient, and inclusive development goals. “It will create an enabling environment for private investment, which is vital for economic growth and particularly beneficial to the poor and vulnerable,” he stated.

Additionally, the operation aligns with Nepal’s climate agenda by enhancing supervision of climate risks, introducing risk-informed pricing for insurance products, setting up a framework for green bonds, and integrating climate commitments into credit products.

Tatsiana Kliatskova, the World Bank’s task team leader for the project, emphasized the broader impact of these reforms. “This operation supports the government’s transformative financial sector reform agenda to promote private sector-led growth and build sector resilience essential for mobilizing private capital,” she said.

This strategic investment is expected to play a crucial role in strengthening Nepal’s financial infrastructure and expanding economic opportunities across the country.