An estimated 67.3 percent of Nepalis have at least one bank account, but there is a huge gap in the number of accounts between males and females, and rural and urban areas, a central bank report revealed.

According to the Financial Access Report 2021 published by Nepal Rastra Bank on Friday, male account holders outnumber females by almost two to one. Among the total 29.92 million account holders in banking and financial institutions, 19.11 million are male and 10.61 million are female.

Likewise, there is a rural-urban gap in the number of bank accounts. There are 251 accounts per 1,000 population in rural municipalities while 953 accounts per 1,000 population in urban municipalities. The gap increases when the number of account holders from rural municipalities is compared with people from sub-metropolitan cities and metropolitan cities.

There are 1,930 and 3,296 accounts per 1,000 population in sub-metropolitan cities and metropolitan cities respectively.

The central bank report says gender bias exists in all provinces and local levels while the urban population has greater access to financial services than the rural population.

“Karnali Province, Province 2 and Surdurpaschim Province have a low number of deposit accounts compared to other provinces,” the report says. “This implies that we need to focus on enhancing financial access in these provinces as well as for females and rural areas. Increasing financial access to unbanked areas and segments requires both demand and supply side approaches.”

Kusum Lama, chairperson at Prabhu Management, a financial service providing company, said, "Financial access starts at home, and since a majority of income earners in most families are male, women have less access to finance. Even in urban areas, women participate less in financial management, and their fathers or husbands manage it for them."

She added, "There is a lack of financial awareness campaigns for females in the country. Unless women are financially literate, their access to finance will be less. Financial access to women will also help them to contribute to the economy.

Lama said that if banks provided subsidies on loans for women, it would help to increase their financial access, as it would encourage them to utilise their rights. "Banks should change their investment patterns to make this happen,” she added.

"Banks and financial institutions seem to be focused on providing loans to the existing businessmen and are reluctant to expand new and inclusive financing programmes that address not just urban customers, but also customers in rural areas," Lama said.

In rural areas, women do vegetable farming, livestock rearing and other income generating work, but it is the males who take the products to market. As a result, women do not see the money they have earned, and their role is limited to production only.

Prabhu Management is working to boost financial literacy in Sudurpaschim Province, where most of the men go to India to earn while the women remain at home, so they can manage the earnings of their male relatives. “We have associated them with prepaid cards or e-wallet,” Lama said.

According to the report, financial technology is more popular among the young and middle age population compared to other age groups. The Covid-19 pandemic has also proven the importance of digital payment systems for business continuity.

The age profile of account holders shows that 96.15 percent of the accounts are held by adults (16 and above) while the majority of account holders are between 20 and 40 years of age.

“Investment in digital payment should continue given its popularity among young users and the uncertainty related to the existence of Covid-19. The use of technology also needs to be expanded to enhance financial inclusion across the country with the effective implementation of digital financial literacy,” the report said.

In terms of electronic payment, the percentage of automated teller machine (ATM) users is 20.35 percent, internet banking users make up 3.86 percent and mobile banking users make up 32.03 percent respectively of the total deposit accounts, the report showed.

Bagmati Province has the highest percentage of financial technology users with 26.11 percent ATM users, 6.40 percent internet banking users and 33.12 percent mobile banking users.

The total number of accounts per 1,000 population stands at 998 while the total number of accounts per 1,000 adult population stands at 1,348.1, as per the report. Individual (natural) accounts stands for 93.48 percent of the total deposit accounts in the banking and financial institutions.

The population per branch stands at 5,268 with the lowest 2,185 in metropolitan areas and the highest 11,716 in rural municipalities. Saving accounts make up the highest number of deposit accounts in banking and financial intuitions while about one-third of the accounts are dormant, the report said.

The number of people with bank accounts has swelled mainly due to the government policy of conducting campaigns to encourage people to open bank accounts, requirement to have a bank account to receive social security allowances, expansion of bank branches to the local level, and increase in the participation of people in the stock market through online purchase and trading mechanisms which require them to have a bank account.

About one-third (33.6 percent) of the total deposit accounts are found to be dormant accounts. This shows that financial access does not guarantee the use of bank accounts. Female accounts are less dormant compared to male accounts, the report revealed. The proportion of dormant accounts is higher for non-financial corporations compared to individual accounts.

Nepal Rastra Bank conducted the study to further explore the status of financial access from regulated banking and financial institutions (A, B, C classes) based on detailed data of deposit accounts as of mid-June 2020.

At that time, there were 5,694 bank branches, 31.88 million deposit accounts, 1.52 million loan accounts, 10.67 million mobile banking customers, 992,724 internet banking customers and 7.24 million ATM card holders.

The 5,694 branches of A, B, C class banking and financial institutions resulted in a ratio of 18.98 branches per 100,000 population.

The concentration of branches is higher in Bagmati and Gandaki provinces compared to other provinces. Province 2 has the lowest number of branches per 100,000 population —9.73 branches.