Money on the Move: Remittances and Mobile Phone Banking in Nepal
Nepal: Development and Social Change
Nepal relies heavily on labor migration and remittances. In the 2010 fiscal year, 23 percent, or over US$ 3.5 billion, of Nepal’s GDP comes from remittances alone (World Bank). At the same time, the mobile phone penetration rate continues to steadily increase, and 41 percent of Nepalese currently own mobile phones (Nepal Telecommunications Authority). This research looks into the gap between Nepal’s remittance economy and its insipient mobile phone banking networks, exploring opportunities for the convergence of these two services. This research starts with an in-depth discussion of the role of remittances in Nepal’s economy and society, specifically in the rural Helambu area. It then discusses the remittance transfer and mobile banking services currently in use in Nepal, why mobile banking in Nepal has not experienced tremendous success, and the ways in which some of the numerous setbacks are being overcome. The research findings close with an exploration of some of the advances in mobile banking soon to appear on the market in Nepal. In the discussion section, several policy recommendations are proposed and discussed. Finally, this paper concludes with predictions about mobile banking and remittances services for the near future and potential areas for further study.