Lack of expansion in jobs at home, with the ever increasing population entering into the labor market each year, has exacerbated the outmigration trend in Nepal. Such exponential growth of both remittances and international labour migration began in the year 2000, with more than four million foreign labour permits issued by the Department of Foreign Employment between the years 2008 and 2017. The largest concentration of these Nepali migrants is in the Gulf Cooperation Council (GCC) nations and Malaysia corridors, predominated by the people from Madhesh and Lumbini Province. The raison d’etre for migration is the remittances that they earn and send back home. The remittances, thus earned, not only help migrants and their family members cope with poverty back home but also form assets which can be channeled into investments in real estate, housing, small enterprises, education, and health. Remittance has both direct and indirect economic effects at household and community levels. Nepal is one of the highest recipients of remittances and is the largest contributor of the country’s foreign currency reserves. Nepal received remittance of USD 8.75 billion in the fiscal year 2019/20 alone (NPC, 2021).

Despite huge inflow of remittances and benefit potential, migrants and their family members have not been able to reap and optimize the benefits from migration. Lower skills, both technical as well as vocational; lack of information; higher migration cost and unethical recruitment practices; difficulty in accessing formal financial services; and lack of access to markets are among the economic constraints faced by poor migrant households and communities. This highly dominates and undermines their capability to harness optimum benefits from their migration endeavor.​

The coronavirus pandemic has largely exacerbated living conditions of the people from disadvantaged communities, mostly the communities that depend upon remittance for subsistence purposes. The National Planning Commission (NPC) has estimated that 618,700 migrants returned within one year after the onset of the pandemic due to job loss in the destination countries. UKaid सीप, through its Challenge Fund partnerships, is supporting disadvantaged migrant communities by promoting fair recruitment, capacity development, easy and affordable access to finance, and market support. After the onset of the pandemic, we have increased our focus on the use of digital solutions for safe and cheaper financial transfers and transactions along with entrepreneurship development of returnee migrants and their families for sustainable income in the country. Partnerships with banks such as Laxmi Bank, Prabhu Bank, Nepal SBI Bank as well as Microfinance Financial Institution (MFI) Sana Kisan Bikas Laghubitta Bittyasanstha Sansthan Limited (SKBBL) are demonstrating solutions to reduce cost of remittance and cost of migration, powered by digital solutions that could decrease the remitting cost even further while enhancing safe transparent flow of remittance. To enable saving and investment potential of remittance, our Challenge Fund partnerships have applied tailored financial products such as enterprise development credit and insurance products to enable productive utilization of funds, especially for migrant returnees and their households led by women.

UKaid सीप adopts a market-led approach that addresses these market constraints in partnership with the relevant market actors including banks and financial institutions. Followed by rigorous study of demand and supply gaps and identification of key market constraints in the migration process—including after the return of the migrants—we are facilitating private sector investment to mitigate these key constraints. Through catalytic funding support from the सीप, reached a partnership with Laxmi Bank, an “A” grade commercial bank in Nepal—along with its micro finance partner Laxmi Laghubitta—we are expanding and refining the use of block chain technology by integrating an Application Programming Interface (API) platform to make loan against remittance and other services more accessible and affordable for migrant households in Madhesh and Lumbini Province, targeting the migrants already working in and traveling to the Dubai and Malaysia Corridors. (View More...)

Similarly, through an ongoing partnership with Sana Kisan Bikas Laghubitta Bittyasanstha Ltd. (SKBBL), a national level financial institution working as a major wholesale lending microfinance institution, we are working to build entrepreneurial capabilities of returnee migrants, women, and socioeconomically disadvantaged groups in agri enterprises—through improved access to tailored and bundled financial products, including credit and insurance products, coupled with skilling—across 12 districts in Madhesh and Lumbini Province. SKBBL is working with 101 Small Farmer Agriculture Cooperatives  that are spread across the Lumbini Province and Province2 with deep rural penetration. The cooperatives have a community insurance system which also ensures that all the investments made through loan disbursements are insured. (View More…)

UKaid सीप’s partnership with Prabhu Bank, an 'A' class commercial bank in Nepal, has promoted  financial inclusion for unbanked migrants and migrant families in Bara, Parsa, Rautahat, Sarlahi and Saptari Districts in Madhesh Province. Over the partnership pilot phase between September 2019 and February 2021, Prabhu Bank introduced suite of human-centered financial products, including savings, insurance, and credit solutions to address the needs of unbanked migrants and their families, and improve the financial inclusion in targeted municipalities of Parsa, Bara, Rautahat, Sarlahi and Saptari Districts in Madhesh Province. (View More...)

Meanwhile, with similar intent, सीप forged partnership with Nepal SBI Bank Ltd (NSBL)—the first Indo-Nepal joint venture in the financial sector—to help improve the lives of the underprivileged and unbanked migrants, through innovative and tailored financial products, while also catering to the needs of start-ups, small and medium businesses as well as large commercial clients aimed at enhancing productive investment of remittance in the country. Over the pilot phase between August 2019 and January 2021, NSBL introduced financial products including savings, insurance, and credit products designed to address the needs of unbanked migrants and their families, and improve financial inclusion in targeted municipalities at Mahottari, Dhanusha and Siraha Districts in Madhesh Province. (View More...)