Finance for Growth Development Policy Financing

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The development objective of Finance for Growth Development Policy Financing for Nepal aims to support the government of Nepal in its efforts to strengthen financial sector stability, diversify financial solutions, and increase access to financial services. The Finance for Growth (F4G) Development Policy Credit (DPC) will support the government of Nepal (GoN) in its efforts to strengthen financial sector stability, diversify financial solutions, and increase access to financial services. The operation will play a key role in addressing the resilience challenges arising from the Coronavirus (COVID-19) pandemic and supporting the medium-term economic recovery efforts of the government. This includes efforts to: (i) improve the ability of Nepal Rastra Bank (NRB) to monitor and respond to the impact of the pandemic; (ii) avoid the negative repercussions of an unfavorable assessment of Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) compliance that can impact trade, remittances and access to the international financial markets; (iii) access different private sector financial solutions to ameliorate natural disaster and health risks such as the Coronavirus (COVID-19) pandemic; (iv) improve the ability of the financial sector to intermediate efficiently and support the economic recovery phase; (v) strengthen the insurance sector towards mitigating vulnerabilities stemming from shocks such as Coronavirus (COVID-19); (vi) increasing the adoption of digital financial solutions that can help during Coronavirus (COVID-19) social distancing policies and support social protection and remittance flows; and (vii) provide the credit infrastructure for the fair allocation of credit during the Coronavirus (COVID-19 )recovery. The reforms are expected to improve the robustness and impact of the financial sector on the real economy, reduce stability risks, develop capital and insurance markets, and widen access to finance.