Understanding Financial Inclusion in Nepal

Demonstrating CrossPay mobile app with the local unbanked

Jackie Tan

Published in

Sentinel Chain

4 min readMar 16, 2018

InfoCorp and Nepal

In September 2017, InfoCorp (the team behind Sentinel Chain) embarked on a journey to Nepal to share our last mile solutions with a panel of government officials and an audience of enthusiastic youths. Why Nepal? Situated among the Himalayan ranges, Nepal has three broad ecological belts, mountain, hill and terrian. Out of around 30 million people, close to 80% of them live in rural area and more than 75% of the population still engage on subsistence farming. Nepal is also one of the least developed countries where 25% of the population is still below poverty line. As such, we saw that there was a lot of good that InfoCorp could do in that region.

Agriculture forms the core of Nepalese economy and provides a source of livelihood for 66% of the population. Livestock is an important part of agriculture in the rural economy that contributes 40 percent of total agriculture GDP in the country. 68% of households own cattles making cattles the most popular class of animal owned, followed by goats (50%), and buffalo (47%). According to a report by Census, there are more than 79.8 million of cattle and bird kept in Nepal making up a mean of 2 cattles per average Nepalese.

Importance Of Agriculture Insurance

With a heavy reliance on agriculture and livestock, insurance enables farmers to remain creditworthy during times of unforeseen distress and avoid falling into the poverty trap. Given the lack of affordable and suitable risk management tools,, a household may be forced to reduce their food consumption, withdraw kids out from school or sell productive assets (livestock in this case) which then puts pressure on their economic and human development prospects when disaster strikes. However, agriculture insurance is not a commercial business in Nepal. The responsibility goes to the government and Insurance Board to deliver insurance services to more than 4 million household whose livelihood depends heavily on agriculture. Non-governmental social organizations, cooperatives, financial institutions have been selling micro insurance products.

Sharing session with Nepal government officials

During the trip to Nepal, we had the privilege to share InfoCorp’s last mile solution to a panel of distinguished government officials and a crowd of hopeful young individuals that are enthusiastic and passionate to bring about this change in their country using new technology. The sharing session started with a formal welcome ceremony for our team followed by a sharing session by InfoCorp CEO Roy on how Livestock tokenization help to avoid liquidating or selling their livestock during times of need. Currently, rural villagers remain stuck in their socioeconomic conditions and inequality affects their motivations and aspirations, trapping them in a cycle of poverty.

***Left:*** *An audience from the crowd raising his questions during Q&A* ***Right:*** *The InfoCorp team together with Nepalese government officials*

The sharing session, attended by members of different government bodies, was well received enthusiastically!

Village visit to Ramkot, Kathmandu

The trip will not be complete without a visit to the village to further understand their day-today lives. Upon arrival, we were greeted by Mr Deepak, a village head in the village of Ramkot, home to a population close to 5,000 villagers.

We had the opportunity to demonstrate livestock tokenization using CrossPay to a villager/ farmer, Ms Gitta. During our demonstration, she tokenized her cow with the assistance of Mr Deepak in exchange for the local currency token (LCT.NRP). With those tokens, she can then purchase some corn and staples from the local supplier at the marketplace of Ramkot. With this, Ms Gitta can keep her cow and its products (milk and manure)and no longer needs to sell her entire cow to make end meets. People like Ms Gitta now have more options to restart her subsistence farming after disasters, such as the recent flood in Nepal.

Testing the app prototype with Gitta, the local villager

A cow can be purchased for around US$900 which is slightly more than what is affordable for most unbanked villagers. A cow can produce between 2 to 4 liters of milk a day and this can be sold for around US$1 per liter. 9 months is the average time for a cow to have an offspring and this calf can be sold for around US$300 at birth. A calf will take 2–3 years to grow into a full-grown cow capable of producing milk.