KATHMANDU, March 25
World Bank has approved a $150 million credit under a policy of 'Finance for Growth' development which is to help in stability, diversify financial solutions of financial sector.
This lending is hoped to increase access to financial services in support of Nepal's green, resilient, and inclusive development.
Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka stated, "A well-functioning financial system is a key enabler for the mobilization of private investment and driver of economic activity. By strengthening the financial sector, this project will contribute to Nepal's green, resilient, and inclusive recovery and growth path, particularly benefiting the poor and vulnerable."
In the press statement released by the organisation on Thursday, it mentioned that the second Finance for Growth operation will support enhanced supervision of the banking sector to address financial stability risks in the context of the COVID-19 pandemic's impacts.
The operation will help open up capital, insurance, and disaster risk financing markets, and foster financial product innovations and will support initiatives to increase liquidity and inclusion through access to external commercial borrowing, financial digitalization, and financial literacy for women.
The operation has a new climate agenda, supporting climate finance resilience policy measures across banking, insurance, and capital markets, which will introduce green loan principles and incentives for green lending as well as new insurance and capital market products.
"Through this project we look forward to supporting the government's transformative financial sector reform agenda which, among others, introduces a first round of reforms to strengthen financial sector resilience against climate-related risks. This will lay down strong foundations for a more stable, less bank-centric and more inclusive financial sector that is better positioned to mobilize private investment and support real economic activity," stated Peter Mousley, World Bank task team leader for the project.
