World Bank2014-07-182014-07-182008-12https://hdl.handle.net/10986/18908This report addresses the establishment of a centralized information and communication technology (ICT) platform for the microfinance sector in Nepal. It has been shown from international experience that ICT improves the efficiency, transparency, and outreach of microfinance institutions (MFIs) and reduces operational costs. There is an opportunity in Nepal to implement similar solutions, and this report provides information on these solutions and offers recommendations for implementing them in Nepal. The microfinance sector in Nepal has many players, but these players have shown few real successes. The sector is largely unsustainable, subsidy driven, and fragmented to the extent that it might not meet the real needs of the country. This report presents a new paradigm for introducing ICT in the microfinance sector of Nepal. The centralized technology platform was chosen as opposed to telecom-led platforms due to its ability to resolve most of the pertinent challenges that Nepal's microfinance sector faces. The paradigm can help remove most of the constraints that have limited the growth of MFIs and kept them from becoming sustainable, moving out to remote and rural areas, and providing more loans to those that need them. In the traditional paradigm, MFIs acquire ICT in an ad hoc fashion and are able to use it only partially to automate their operations.en-USCC BY 3.0 IGOACCESS TO CAPITALACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO FORMAL FINANCEACCESS TO INFORMATIONACCOUNTINGADBAFFORDABILITYAGRICULTURAL DEVELOPMENT BANKANTI-MONEY LAUNDERINGAPPLICATION SERVICE PROVIDERAUDITINGB2BB2CBANK ACCOUNTSBANK BRANCHESBANK CREDITBANK LOANSBANKING MODELSBANKING SECTORBANKING SERVICESBANKING SYSTEMBARRIERS TO ENTRYBORROWERBUSINESS PLANBUSINESS-TO-BUSINESSBUSINESS-TO-CUSTOMERC2CCAPACITY BUILDINGCDSCENTRAL GOVERNMENTSCLEARING HOUSECOLLATERALCOMMERCIAL BANKCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMMERCIAL LOANSCOMMUNICATIONS TECHNOLOGYCONNECTIVITYCONSUMER PROTECTIONCREDIT BUREAUCREDIT BUREAUSCREDIT FACILITYCREDIT INFORMATIONCREDIT INFORMATION BUREAUCREDIT MECHANISMSCREDIT POLICYCREDIT PROGRAMSCREDIT PROVISIONCREDIT UNIONCREDIT-WORTHINESSCUSTOMER BASEDEPOSITDEPOSIT ACCOUNTSDEPOSIT PRODUCTSDEPOSITSDEVELOPMENT BANKDEVELOPMENT BANKSDEVELOPMENT CENTERDIGITAL NETWORKDONOR FUNDSE-COMMERCEEARNINGSECONOMIC ACTIVITIESECONOMIC GROWTHECONOMIC REFORMSECONOMIES OF SCALEELECTRONIC DATAELECTRONIC FORMELECTRONIC FUNDSELECTRONIC FUNDS TRANSFERELECTRONIC FUNDS TRANSFER POINT OF SALEENABLING ENVIRONMENTEXCESS LIQUIDITYEXCLUSIONEXPENDITUREEXPLOITATIONFAMILIESFAMILY INCOMEFARMERSFINANCE COMPANIESFINANCIAL ACCESSFINANCIAL ANALYSISFINANCIAL DATAFINANCIAL HEALTHFINANCIAL INFRASTRUCTUREFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIARYFINANCIAL INTERMEDIATIONFINANCIAL PERFORMANCEFINANCIAL PRODUCTSFINANCIAL PROVIDERSFINANCIAL REFORMFINANCIAL REGULATORSFINANCIAL SERVICESFINANCIAL SERVICES FOR LOW-INCOME HOUSEHOLDSFINANCIAL SUPPORTFINANCIAL SUSTAINABILITYFORMAL FINANCIAL INDUSTRYFORMAL FINANCIAL INSTITUTIONSFORMAL FINANCIAL MARKETFORMAL FINANCIAL SECTORFORMAL FINANCIAL SERVICESGLOBAL POSITIONING SYSTEMSGOVERNMENT POLICYGPSGROUP GUARANTEEHOUSEHOLDSHOUSINGHUMAN RESOURCE MANAGEMENTICTINCOME-GENERATING ACTIVITIESINDEBTEDNESSINFORMAL BORROWINGINFORMATION NETWORKINFORMATION SYSTEMSINFORMATION TECHNOLOGYINFRASTRUCTURE MANAGEMENTINNOVATIONSINSTALLMENTSINSTITUTIONAL CAPACITYINTEREST PAYMENTINTEREST RATEINTEREST RATESINTERNATIONAL BEST PRACTICESINTERNET SERVICE PROVIDERISPSKEY CHALLENGEKEY CHALLENGESLAWSLEGAL FRAMEWORKLENDERLIMITED ACCESSLOANLOAN GUARANTEESLOAN OFFICERLOAN OFFICERSLOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRODUCTSLOANABLE FUNDSMANAGEMENT INFORMATION SYSTEMSMARKET OUTREACHMARKET REACHMFIMFISMICRO FINANCEMICROCREDITMICROFINANCEMICROFINANCE INSTITUTIONSMICROFINANCE LOANMICROINSURANCEMONEY TRANSFERMULTIPLE ACCESSNONPERFORMING LOANSOPERATIONAL COSTOPERATIONAL COSTSOUTREACHOUTSTANDING LOANSOVERHEAD COSTSPACKET RADIOPACKET RADIO SERVICEPAYMENT SYSTEMSPOINT OF SALEPOINT-OF-SALEPOLICY ENVIRONMENTPRIVATE BANKSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRODUCTIVITYPROFITABILITYPROVISION OF CREDITPUBLIC FUNDSRATES OF INTERESTREGIONAL DEVELOPMENT BANKSREGULATORY ENVIRONMENTREGULATORY FRAMEWORKREGULATORY OVERSIGHTREMITTANCEREMITTANCESREPAYMENTREPAYMENTSRETAINED EARNINGSRURAL FINANCESAVINGSSAVINGS PRODUCTSSAVINGS SERVICESSMALL BUSINESSSMALL BUSINESSESSMALL FARMERSMALL FARMERSSMART CARDSSYSTEMIC RISKTECHNICAL ASSISTANCETECHNICAL SUPPORTTECHNOLOGY DESIGNTECHNOLOGY PLATFORMTELECOMTELECOMMUNICATIONTELECOMMUNICATIONSTELECOMMUNICATIONS AUTHORITYTELEPHONETELEPHONE PENETRATIONTERRORISMTRAINING CENTRETRANSACTION COSTSTRANSLATIONUNIONUNIONSUNIVERSAL ACCESSVILLAGEWHOLESALE FUNDING10.1596/18908