Requests for Proposals Expanding the Outreach of Financial Services In

Requests for Proposals

Expanding the outreach of financial services in local units

UK aid Sakchyam Access to Finance Programme invites applications from commercial banks operating in Nepal, to expand their footprints and outreach aimed at serving the un/underserved rural population, mobilize local financial resources, SAKCHYAM’S EXPERIENCE channelize central government budgetary Global IME’s Bank’s Extension counter at Jogbudha, Dadeldhura support including social security payments and Jogbudha, Parshuram Municipality is located around 40KM from Budar, a mid-point between Dhangadhi and Dadeldhura. Prior Sakchyam facilitate financial activities of intervention, the locals had to visit either Mahandra Nagar, Dhangadhi or local government and private Dadeldhura for any sizeable financial transactions, remittance & social businesses for the security payments. Also, all the government institutions used to conduct development of local their financial transactions at Dadeldhura. economy, sustainably. After With Sakchyam’s support Global IME Bank Ltd. opened an ‘Extension the government’s decision to counter’ at Jogbudha of Parshuram Municipality on May, 2015. By Dec. 2017, ensure presence of the extension counter has added almost 6,000 customers to the bank, ‘commercial banks’ in all 753 facilitated more than 4,000 remittance payments and helped payment of local units, there still are 113 more than 19,000 social security payments. Amongst a range of benefits local units which have failed that the presence of the Global IME’s touchpoint afforded to local populace, to get adequate interests one was significant reduction in travel time and associated costs for the from the commercial banks. beneficiaries of ‘remittance payment’ and ‘social security payments’ Bellauri Branch, Bank of Kathmandu Ltd. Sakchyam believes presence After the first season of ‘Sugarcane Invoice Discounting’ scheme that BOK of the commercial banks in introduced in partnership with Sakchyam and Mahakali Sugar Mill in 2015, these rural and remote it realised the range and magnitude of financing gaps the locals were locations can be pivotal to facing. Although agriculture and Sugarcane farming was the obvious reinvigorate local economic dominant factor in the local economy but there were also local trading and activities. We are also small businesses which had potential to grow. Local FIs and few other cognizant of the fact that such national level FIs were there but high cost, slow processing time associated branches, especially in their with them, meant individuals/businesses with any sizeable financing needs early years of operation, will had to visit Dhangadhi or Mahendra Nagar (Market centres that were approx. 30KM away and accessible through fair weather roads) face operational issues and difficulties, take up additional After Sakchyam’s support, BOK opened a full-fledged bank branch at costs leading to question on Bellauri on Dec. 2016. Bellauri branch after its operation not only become their long term sustainability. one of the first bank branch to open maximum number of accounts within in 3 months but went on to reach its BEP within first year of its establishment. The branch currently is one of the leading branch of the bank in terms of small ticket loans to agriculture sector. 1

In order to facilitate this joint bid to promote access to financial services in rural and remote local units, Sakchyam invites applications from interested commercial banks to open bank branches in Sakchyam priority regions totaling 58 local units. Details on the specific eligible locations are given in Annex – I.

Sakchyam Support:

A) Eligible locations & Categorization Category of Local unit locations* Province Districts A B C Total Pyuthan 1 2 3 5 Rolpa 3 1 4 Rukum 2 2 Dailekh 1 1 2 Dolpa 4 4 Humla 3 1 4 Jajarkot 2 2 4 6 Jumla 1 1 2 Kalikot 2 3 1 6 Mugu 2 2 Rukum 1 1 Salyan 4 1 5 Achham 2 2 4 Baitadi 1 1 Bajhang 3 2 5 7 Bajura 4 1 5 Darchula 1 1 Doti 1 1 2 Kailali 1 1 GRAND TOTAL 35 13 10 58 *The categorization of locations from ‘A’ being most difficult to ‘C’ being least difficult is based on Human development Index, access to basic amenities, total population etc. The information should be used only for general reference and for the purpose of this RFP only.

B) Criteria & funding limit - Sakchyam funding will be for establishing bank branches in the local units as specified in Annex –I.

- Applications that are competitive and are committed to cover higher number of local units (more than 6) will be accorded priority. - Applications from the commercial banks that are committed to introduce downscaling of products and services and committed for further deepening financial services in the proposed/other potential locations will be prioritized. - Bidder should commit to establish and operate the committed branches by 14 July 2018. - Sakchyam CF grant will be for maximum of 2 years and will be capped as following: o Maximum of 40% of the operation cost per branch in case of ‘category A’ locations. o Maximum of 30% of the operation cost per branch in case of ‘category B’ locations. o Maximum of 20% of the operation cost per branch in case of ‘category C’ locations. - Sakchyam will make final decision on funding in the locations that are proposed/preferred by multiple banks, if any.

What is not supported by Sakchyam? Sunk costs, investment in land and building and four wheel vehicles, and overheads of existing operations should not be included in the project cost. The activities that the financial service provider will do anyway, without Sakchyam or external support, should not be included as part of project.

Beneficiaries: The project should aim to address the market failure situation and should aim to provide financial services to unserved or underserved individuals, especially women, youth and other disadvantaged people, MSMEs and other entities.

Eligible bidders: Any commercial banks operating as a going-concern in Nepal and having sufficient funds allocated for investing in the project.

In-principle or final approval from the top management/ board of the bidder should be obtained prior to submitting Full Applications. Special approval from the top management should be obtained to timely allocate sufficient resources to effectively implement the project upon approval.

Review and Decision on funding > The Independent Assessment Panel members drawn from industry experts and renowned professionals involved in Nepalese financial sector will make the decision on Sakchyam funding and their decision will be final. > Prior the presentation of the application to the IAP, Sakchyam will review them and provide technical feedback to individual bidders for improvement.

> Technical assistance from Sakchyam is available to the banks that are interested in downscaling their products and deepen the financial services in the proposed/other potential locations

Project duration All the projects should utilize the entire project budget within 2 years. At the same time, projects should attain commercial sustainability within 2 years of operation and the bidders should continue project activities on their own after Sakchyam funding.

Bidding process Potential bidders should use standard templates for drafting their proposal. Please download the templates from http://sakchyam.com.np/careers/call-for-proposals/ or register a request by writing an email to [email protected]. Completed full application should be sent electronically to [email protected]. Total size of the electronic file should be less than 10MB.

Interested bidders are encouraged to review the Full Application Information Pack before they start drafting the Full Application. The pack is downloadable from Sakchyam website and or can be received by writing a request to [email protected].

Key Dates > Sakchyam will organize one information workshop to answer questions from the potential bidders on 16 March 2018, at 12:30 PM at the office of NBA, Thapathali, Kathmandu. > The last date to submit applications is 6 April 2018. Applications received after this date will not be entertained. > Sakchyam Challenge Fund managers can be contacted for any queries and questions on the RFP by email to [email protected] . In addition,

Attachment Annex – I (Details of 58 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7)

Annex I: Details of 58 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7

Availability of Available Means of Communication Nearest Road Access Nearest Police Presence Yearly Central Social Security Road distrance Electricity Yearly Social Province Name of the Municipality Head-Quarter of HDI of Population in Government Payment from nearest Categorisation District Security Payments No. / Rural Municipality the Local Unit District the Local Unit Funding Recipients Commercial Bank Mobile Other Main Micro- Location Distance Type of Road Location Distance by Sakchyam (NPR '000) Landline Mobile (NPR '000) (Number) Branch (in kms) Internet Internet Grid Hydro Name (in kms) Name (in kms)

Pancheswor Rural Baitadi Aam Chaura 0.416 18,766 237,703 3,001 40,622 21 No Yes Yes No No No Aam Chaura 0 Soil Kalau 5 A Municipality

Api Himal Rural Darchula Khandeshori 0.436 6,719 151,657 399 7,654 18 No Yes Yes No No Yes Khandeshowi 0 Soil Khandeshori - B Municipality

Mohnyal Rural Kailali Khimdi 0.460 22,053 295,427 2,258 32,666 Not Available No Yes Yes No No No Sukhad 40 Soil Khimadi - C Municipality

Aadarsha Rural Kalikasthan 0.407 23,945 284,371 3,333 43,656 23 No Yes Yes No Yes No Mauwa 0 Soil Dipayal 23 C Municipality (Mauwa) Doti Daud Sayal Rural Municipality 0.407 19,551 237,321 2,479 31,394 45 No Yes Yes No No No Dudaligada 0 Soil Dewarmandau 2 A (Dudaligada)

a whole day 2 days Kanda Rural Municipality Kanda Bazaar 0.365 2,182 124,847 549 4,867 40 No No No No No No Talkot walking Soil Dhuli walking A distance distance

Durga Thali Rural Chaudhari Bazaar 0.365 12,972 184,889 3,548 36,173 23 No Yes Yes No Yes No Chaudhari 0 Soil Malumela 10 A Municipality

Byasi 4 hours Chhabish Pathibhera Rural Byasi Bajhang 0.365 16,296 247,191 4,163 39,778 25 No Yes Yes No No Yes Chaughanpat 0 Soil Bisaunachor walking A Municipality Chaughanpata a distance

Surma Rural Municipality Daulichaur 0.365 9,022 153,057 2,381 19,692 15 No Yes Yes No Yes No Daulichaur 0 Soil Daulichaur - B

Kot Bhairab (Kholi 7 Thalara Rural Municipality 0.365 17,952 244,866 4,066 41,690 11 No Yes Yes No No Yes Kholi Bazaar 0 Soil Malumela 5 B Bazaar)

Turmakhand Rural Turmakhand 0.378 24,940 325,228 6,289 62,513 26 No Yes Yes No No No Turmakhad 0 Soil Turmakhand - A Municipality

Dhakari Dhakari Rural Municipality Dhakari Bazaar 0.378 21,562 304,827 5,666 54,468 26 No Yes Yes No No No 0 Soil Dhakari Bazaar - A Bazaar Achham Ramaroshan Rural Santada (Muza 0.378 25,166 307,762 5,987 57,430 40 No Yes Yes No No No Muza Bagar 0 Soil Santada 1 C Municipality Bagar)

Bannigadhi Jayagadh Bardadevi 0.378 17,359 211,676 4,148 49,274 16 No Yes Yes No Yes No Jayagadh 0 Pitched Jayagadh - C Rural Municipality (Jayagadh)

2.5 hours of 2.5 hours of Himali Rural Municipality Baandhu 0.364 9,214 184,137 975 15,149 35 No Yes Yes No Yes No Kolti walking Soil Kolti walking A distance distance 2 hours of Chhededah Rural Dogadi Bazaar 0.364 18,545 233,963 2,074 30,055 30 No Yes Yes No No Yes Taprisera walking Soil Dogadi - A Municipality distance 1.5 hours 30 minutes of Swami Kartik Rural Bajura Wai 0.364 12,784 214,786 1,835 21,890 38 No Yes Yes No No Yes Kolti walking Soil Piluchaur walking A Municipality distance distance 1.5 hours 1.5 hours of Pandab Gufa Rural Jagannath 0.364 9,432 157,655 1,330 16,610 37 No Yes Yes No No Yes Piluchaur walking Soil Piluchaur walking A Municipality (Juddhi) distance distance Half and Goumul Rural Municipality Manakot 0.364 8,515 165,349 781 11,426 11 No Yes Yes No Yes No Martadi hour from Soil Martadi 0.5 hour walk B Martadi Annex I: Details of 58 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7

Lokandra Karnali Thatikaad Rural (Thatikhad 0.422 18,896 231,067 2,006 25,987 21 No Yes Yes No No No Highway 25 Gravel Lokandra - B Municipality Bazaar) (Rama ghat) Dailekh Dailekh bazar Raniban Mahabu Rural Municipality 0.422 19,277 237,140 2,221 29,681 30 No Yes Yes Yes Yes No ( towards 30 Gravel Gairibas - A (Gairabas) head quarter) Surkhet To Shivalaya Rural Sima 0.393 15,269 214,732 1,300 16,982 20 No Yes Yes No No Yes Gagarkot 40 Gravel Sima - B Municipality Road Kalimato To Barekot Rural Municipality Nayakwada 0.393 18,083 263,190 1,715 20,335 50 No Yes Yes No No Yes Jumla 0.2 Gravel Nayakbada - A Goreto Jajarkot Junichande Rural Thala To Yet to be Majkot (Syalkhola) 0.393 21,733 282,431 2,646 30,353 24 No Yes Yes No No Yes 150 Gravel Garkhakot B Municipality Dailekh bazar established

Daha To Yet to be Kuse Rural Municipality Dhime (Bharma) 0.393 20,621 279,958 2,116 24,053 28 No Yes Yes No No Yes 200 Gravel Garkhakot A Dailekh established

Tajakot Rural Municipality Mailaa (Puima) 0.376 5,964 135,796 2,659 23,328 35 No Yes Yes No No No - - - - N/A A

Aadanchuli Rural Shreenagar 0.376 7,116 144,910 3,211 26,890 40 No Yes Yes No No No - - - - N/A A Municipality Humla Chankhelee Rural Shreemasthaa 0.376 5,517 154,800 2,653 19,961 20 No Yes No No No Yes - - - - N/A B Municipality (Chitlang)

7 Namkha Rural Municipality Muchu Gaun 0.376 3,900 156,546 2,231 27,022 35 No Yes No No No No - - - - N/A A

Karnali Palata Rural Municipality Thirpu 0.374 15,303 221,240 2,513 25,056 30 No Yes Yes Yes No Yes 2 hrs walk Pitched thripu - A highway

Mahabai Rural Municipality Odanaku 0.374 8,323 167,675 1,434 16,454 12 No Yes Yes No No No - - soil - N/A B

Karnali Yet to be Kalika Rural Municipality Sukatiya 0.374 14,080 187,035 2,686 30,050 8 No Yes Yes Yes No No 2 hrs walk Gravel Hawdi C Highway established Kalikot Naraharinath Rural Karnali Kumal Gaun 0.374 21,366 261,898 4,082 46,642 19 No Yes Yes No No No 2 hrs walk Gravel - N/A B Municipality Highway

Sanni Tribeni Rural Karnali 6 Mehelmudi 0.374 12,846 186,784 2,351 27,538 19 No Yes Yes No No Yes 3hr walk Gravel - N/A B Municipality Highway

Pachaljharana Rural Karnali Ramnakot (Jarkot) 0.374 12,343 191,896 1,910 24,206 32 No Yes Yes No No No 1-2 km walk Gravel - N/A A Municipality Highway

Patarasee Rural Karnali Dilli Chaur 0.409 14,571 223,627 3,763 32,537 21 No Yes Yes No No Yes 20 Gravel - N/A B Municipality Highway Jumla Karnali Hima Rural Municipality Kalika Khetu 0.409 10,961 170,810 3,124 26,990 5 No Yes Yes No No Yes 20 Gravel - N/A C Highway

Soru Rural Municipality Jima 0.397 12,238 236,465 2,082 28,603 27 No Yes Yes No No No Gamgadi - - - N/A A

Mugu Mugumkarmarag Rural Pulu 0.397 5,396 160,057 924 17,311 28 No Yes Yes No No No - - - - N/A A Municipality 6

Annex I: Details of 58 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7

Chharka Tangsong Rural Chhaarkhaa 0.401 1,451 132,560 617 7,226 95 No No No No No No - - - - N/A A Municipality

Kaike Rural Municipality Sahartara 0.401 3,576 127,372 652 8,177 15 No No No No No No - - - - N/A A

Dolpa Muikechula Rural Narku 0.401 5,129 143,688 1,050 11,222 23 No No No No No No - - - - N/A A Municipality

Dolpo Buddha Rural Dho 0.401 2,126 112,146 434 5,261 52 No No No No No No - - - - N/A A Municipality

Bhalchaur Darma Rural Municipality 0.441 19,966 218,893 1,689 24,624 40 No Yes Yes No Yes No Tharmare 15 Gravel - N/A A (Tharula Bazaar)

Kumakhamalika Rural Marmaparikaand 0.441 24,972 275,647 2,004 30,158 44 No Yes Yes No Yes No Shital pati 41 Gravel - N/A A Municipality aa (Raghe Chaur)

Dhorchaur Rural Siddheshwari Salyan 0.441 13,593 180,544 1,043 13,942 24 No Yes Yes No Yes No Shital pati 12 Gravel - N/A B Municipality (Dhor Chaur)

Botechaur or Kalimati Rural Municipality Rampur Kalimati 0.441 23,005 280,247 1,448 22,762 40 No Yes Yes No Yes No 20 Gravel - N/A A Hapure

Bangad Kupinde Devsthal 0.441 36,052 392,864 2,669 39,082 13 No No No No No No - - - - N/A A Municipality

Chirneta 7 Airawati Rural Municipality Baraula 0.413 22,392 245,701 2,404 36,262 27 No No No No Yes No (highway to 32 Gravel - N/A A Pyuthan

Okharkot Pyuthan Jhimruk Rural Municipality 0.413 27,931 292,893 2,954 46,841 16 No Yes Yes Yes Yes No Bijwar 18 Gravel - N/A C (Machhi)

Naubahini Rural Lung (Bahane) 0.413 30,292 317,455 2,992 45,809 16 No Yes Yes Yes Yes No Bijwar 19 Gravel - N/A C Municipality

Sunchhahari Rural Jaumakasala 0.395 16,034 225,293 1,882 32,042 14 No No No No No No - - - - N/A A Municipality

Sukidaha Rural Jinabang 0.395 20,009 233,928 1,555 15,703 26 No No No No No No - - - - N/A A Municipality 5 Rolpa

Lungri Rural Municipality Bada chaur 0.395 23,631 248,179 2,279 34,781 7 No Yes Yes No Yes No Sulichaur - - - N/A A

Raangkot Duikholi Rural Municipality 0.395 20,778 242,027 982 15,398 25 No Yes Yes No No No Ghartigau 32 Gravel - N/A C (Duikholi Bazaar)

1 hrs by Bafikot Rural Municipality Bafikot 0.431 18,696 261,734 1,771 23,326 11 No Yes No No Yes No Musikot Gravel - N/A C vechile

Rukum Bhume Rural Municipality Morabang 0.431 18,589 258,044 1,752 26,405 20 No Yes No No No No - - - - N/A A

Putha Uttarganga Rural Kol 0.431 17,932 288,761 1,862 25,471 23 No No No No No No - - - - N/A A Municipality

Total 906,932 12,852,745 134,928 1,601,479 Note: The above information is collected by Sakchyam through different primary and secondary sources. FIs should undertake their own feasibility assessment, prior to selecting these local units for branch expansion/any other commercial decision.