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 109 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 67 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 Arghakanchi 0 1 0 1 5 Dang 0 1 0 1 Pyuthan 0 0 2 2 Rolpa 2 0 1 3 Rukum 2 0 0 2 Dailekh 1 1 0 2 Dolpa 6 0 0 6 Humla 4 1 0 5 Jajarkot 3 1 0 4 6 Jumla 0 1 1 2 Kalikot 2 3 1 6 Mugu 2 0 0 2 Salyan 2 0 0 2 Achham 2 0 1 3 Baitadi 2 0 1 3 Bajhang 6 2 0 8 7 Bajura 4 2 0 6 Dadeldhura 1 1 0 2 Darchula 3 1 0 4 Doti 2 0 0 2 Kailali 0 0 1 1 GRAND TOTAL 44 15 8 67 *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 67 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7)

Annex I: Details of 67 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7 [updated on 20 March 2018]

Pancheswor Rural 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

Baitadi Sigas Rural Municipality Sigas 0.416 21,510 303,551 2,397 32,758 20 No Yes Yes No No Yes Sigas Not available Soil Gajari 6 A

Dogadha Kedar Rural Y-Max & Khochlek 0.416 24,632 315,279 3,913 61,260 14 No Yes Yes Yes No Khochlek Not available pitched Khochlek - C Municipality Subesu

No Nava Durga Rural Banchaura 0.442 19,957 233,961 2,600 41,059 8 No Yes Yes No (under Solar only Banchura Not available Soi. Seri 2 B Municipality process) Dadeldhura Ganyabdhura Rural 12 KM pitched Badal 0.442 15,093 197,612 1,973 31,505 30 No Yes Yes No Yes No Badal Not available Badal - A Municipality and 18 KM soil

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

1 hours Duhu Rural Municipality Hikila 0.436 10,818 170,933 932 14,208 16 No Yes Yes Sky Pro No Yes Hikila Not available soil Huti walking A distance Darchula 1.5 hours 2 hours by vehicle and 4 hours 4 hours walking Lekam Rural Municipality Kharkada 0.436 14,838 225,767 1,827 29,458 No Yes sky pro Sky Pro No solar Airichhina 0 Chaupata walking A walking distance distance distance

4 hours walking Byas Rural Municipality Sunsera 0.436 10,347 196,824 815 13,296 Not Available No Yes 0 Sky Pro No Yes/solar Dunhu 0 Sunsera - A distance

Mohnyal Rural Kailali Khimdi 0.460 22,053 295,427 2,258 32,666 - No Yes Yes No No No Sukhad 40 Soil Khimadi - C Municipality

Badi Kedar Rural Khadyauli 0.407 16,720 303,033 1,209 16,442 Not Available No Yes Yes No No Solar Khadyuli Not available Gravel BP Nagar 20 A Municipality 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 7 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

Bajhang Kot Bhairab (Kholi 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)

Talkot Rural Municipality Khaula 0.365 11,557 202,449 2,991 26,959 30 No Yes Yes No Yes No Kaula Not available soil Khaula - A

Masta Rural Municiaplity Bhatekhola 0.365 14,951 211,957 4,338 39,509 20 No yes Yes No No Yes/Solar Bhatekhola Not available soil Chainpur 20 A

Kedar Syeu Rural Deura 0.365 21,307 283,004 5,486 51,266 40 No Yes Yes No Yes Solar Deura Not available pitched and soil Bagthala 6 A Municipality

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 Achham 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

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)

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

Bajura 7

Annex I: Details of 67 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7 [updated on 20 March 2018]

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

World Triveni Municipality Toli Dewal 0.364 18,363 235,521 2,419 33,739 12 No Yes Yes No Yes Toli Dewal Not available soil Toli Dewal - B Link

Half and hour Goumul Rural Municipality Manakot 0.364 8,515 165,349 781 11,426 11 No Yes Yes No Yes No Martadi Soil Martadi 0.5 hour walk B from Martadi

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)

Triveni Nalgadh Rural Khagenkot 0.393 25,597 336,563 2,875 33,770 31 No Yes Yes No No Yes Khalanga 31 gravel road Dalli - A Municipality

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 Not 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 Available

Daha To Not 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 Available

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

Chankhelee Rural Shreemasthaa Humla 0.376 5,517 154,800 2,653 19,961 20 No Yes No No No Yes - - - - N/A B Municipality (Chitlang)

Kharpunath Rural 7 Kharpunath 0.376 6,011 150,846 2,294 21,122 10 No Yes Yes VSAT No yes Simikot 10 gravel road Kharpu - A Municipality

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 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 N/A C Highway Kalikot Naraharinath Rural Karnali 6 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 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 6

Annex I: Details of 67 Local Units Requiring Commercial Bank Presence in Provinces 5, 6 and 7 [updated on 20 March 2018]

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 Baitadi Pulu 0.397 5,396 160,057 924 17,311 28 No Yes Yes No No No - - - - N/A A Municipality

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

Muikechula Rural Narku 0.401 5,129 143,688 1,050 11,222 23 No No No No No No - - - - N/A A Municipality Dolpa Dolpo Buddha Rural Dho 0.401 2,126 112,146 434 5,261 52 No No No No No No - - - - N/A A Municipality

In sey Se Phoksundo Rural Saldang 0.401 3,099 121,528 1,160 13,488 Not Available No Yes Yes No NO No Dunai 1.5 days walk walking trail Phoksundo - A Municipality Gaupalika

NTC/SK Jagdulla Rural Municipality Kai Gaun 0.401 2,273 130,358 853 8,513 Not Available No Yes NO No Yes Majgau 2.5 day walk Not available Kai gaun - A Y

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) Salyan Kumakhamalika Rural Marmaparikaanda 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 a (Raghe Chaur)

Arghakanchi Malarani Rural Municipality Khandaha 0.482 28,044 337,601 2,399 38,179 Not Available NO Yes Yes No Yes No Sandikharka 20 Gravel road 0 - B

Rajpur ( now it is East west Rajpur, Ilaka Dang Rajpur Rural Municipality proposed in 0.485 25,037 285,536 1,409 23,453 Not Available No Yes No No Yes No highway, 36 Not available - B Police Jahare) Kalakate

Okharkot Jhimruk Rural Municipality 0.413 27,931 292,893 2,954 46,841 - No Yes Yes Yes Yes No Bijwar 18 Gravel - N/A C (Machhi) Pyuthan Naubahini Rural Lung (Bahane) 0.413 30,292 317,455 2,992 45,809 - No Yes Yes Yes Yes No Bijwar 19 Gravel - N/A C Municipality

Sukidaha Rural 57 Jinabang 0.395 20,009 233,928 1,555 15,703 - No No No No No No - - - - N/A A Municipality

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

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

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

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

Total 1,010,741 14,797,906 156,820 1,854,137 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.