World Bank provides $200m for COVID-19 resilience

Kathmandu, Sept. 18

The World Bank on Friday approved a $200 million 'Finance for Growth' development policy credit to Nepal.

The support is provided to strengthen financial sector stability, diversify financial solutions, and increase access to financial services in support of Nepal’s COVID-19 resilience and recovery efforts.

“In this era of COVID-19, protecting people’s lives is the priority, but giving a boost to economic recovery is equally urgent,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka.

He said that this project and WB support would pave the way for the financial sector and capital and insurance markets to strengthen resilience and more effectively contribute to Nepal’s COVID-19 recovery.

According to a statement issued by the World Bank, the 'Finance for Growth' operation will support enhanced supervision of risks confronting the banking and financial institutions, especially in the context of the pandemic’s impacts.

"The operation will also help build capital, insurance, venture capital and private equity and disaster risk financing markets through regulatory reforms. This will help open new investment opportunities for market actors and crowd-in private financing," it said.  

The other critical area of focus is to expand access to finance for households, women and firms through regulatory and other reforms that will attract additional inflows of international finance and mobilize digital services, credit infrastructure and literacy programs. 

The project supports the government’s significant reform agenda to enable the financial sector to better respond to the new socio-economic challenges arising from the COVID-19 pandemic, said the multilateral donor.

According to Peter Mousley, Project Task Team Leader of the World Bank, initiatives to extend access to digital financial services and attract private financing to complement the government’s fiscal resources to address disasters are two innovations that will significantly benefit households and women in Nepal.