As financial institutions continue to increase their market penetration, people are getting more options for financial services.  People living in Terhathum district are experiencing it firsthand.

In the past few years, people used to borrow from local money lenders, paying high interest rates in order to manage their financial needs.

The district headquarters Myanglung had only branches of two state-owned banks-Nepal Bank and Agriculture Development Bank, and financial access was limited to few people, until a few years back. These banks were unable to fulfill the loan demands of the local people. 

But things have changed now. There are more than a dozen banking branches of commercial and development banks, including cooperatives offering their services. 

Local people and traders said that the increased penetration of banking and financial institutions (BFIs) has changed the face of the district.

Sabha Poudel, former president of Chamber of Commerce and Industry, Terhathum, said that BFIs have been financing most of the trading and production activities in the district. 

Besides BFIs, a number of cooperatives have also been serving the people. Now banking access has reached the rural areas as well. Yam Nath Dahal, branch manager of Nepal Bank, said that the district has seen a significant rise in financial transactions in recent days.  

Tulsi Dhakal, a trader, said the BFIs have helped increase financial access to majority of people. “It has also given people multiple options for financial services.”

The Cottage and Small Industry Development Board record shows that business activities have been flourishing in the district with the penetration of the BFIs. The district has seen a sharp rise in property transactions, trading, production businesses and agricultural activities like poultry and bee-keeping due to easy access to credit. 

The expansion in banking business has been attributed to an increasing inflow of remittance and a rising number of tourists in the district.  Unlike the state-owned banks, the BFIs have been diversifying their loan portfolio. In addition, these BFIs have even simplified the process of approving loans in order to attract customers.

Commercial banks such as Sanima Bank, Sunrise Bank, SBI Bank and Global IME Bank have been offering their services in Myanglung. Likewise, Janata Bank and Makalu Development Bank have opened their branches in Jirikhimti, a market centre in Myanglung. Mount Makalu Development Bank has also been doing its business in Basantapur — one of the key tourists destinations.  

Nepal Bangladesh Bank is operating in Sankranti Bazaar, while a number of saving groups run by women have been offering financial service in rural areas.