Nepal Rastra Bank (NRB), the central bank, says its Digital Finance Innovation Hub had 50 engagements with fintech innovators and financial institutions as of 12 October. Fintech means financial technology firms and services. The bank published the figures in an impact report on 13 October.
The report classes 20 of the 50 as “market ready”. Thirty of the 50 participants are unlicensed fintech firms, so the gap between readiness and approval is the main question for consumers.
Who is taking part
Of the 50 participants, 30 are unlicensed fintech firms, according to NRB.
Eight are licensed payment system operators, four are licensed banks and financial institutions, and three are licensed payment service providers.
Three are individual innovators. One is a licensed remittance company, and one is a partnership between a payment service provider and a bank or financial institution.
Unlicensed does not mean illegal. It means these firms are using NRB’s innovation channel without holding a licence in the listed categories.
What is being built
Payments lead with 12 innovations, followed by digital lending with 11 and credit scoring with seven. Embedded finance has five, and open banking or open finance has four. Another four fall under other areas. Regulatory technology has three, digital onboarding two, and digital identification and supporting technology one each.
Payments covers new ways to move money. Digital lending covers online loan applications and loan management. Credit scoring means tools that help lenders judge whether a borrower can repay. Embedded finance puts financial services inside non-financial apps. Open banking lets approved outside services use customer data with consent. RegTech helps firms meet reporting and compliance rules.
The 50 innovations sit at different stages. Twenty are market ready, or 40 per cent. Seven are pilot ready, seven are under development and eight are at the conceptual stage. Four have a prototype, three are being planned for the near future, and one is in closed-user-group testing (testing with a limited, selected group of users).
Technical readiness and regulatory permission are different things. A product can be built and ready for market but still need a licence, an approval or a licensed partner. The report does not list the 20 products, name their developers or show which have all the approvals to launch.
What the hub does
NRB describes the hub as a channel that connects fintech innovators with the central bank and other regulators. It explains existing laws and rules, gives non-binding guidance, and passes feedback to NRB departments to help shape future policy. Non-binding means the guidance does not commit NRB to approve a product.
There are 20 preliminary interactions with innovators, 14 regulatory issues clarified through the hub secretariat and nine proposals under review. Three innovators received non-binding guidance, three pieces of policy feedback went to relevant departments, and formal proposals were still awaited from three groups.
What it could mean for consumers and businesses
Possible gains include faster digital payments, easier access to credit if lending and scoring tools are well designed, more partnerships between banks and technology firms, and earlier detection of unclear or outdated rules.
Open questions include consumer protection in digital lending, covering fees, debt collection and complaints. They also include privacy and cybersecurity when personal or financial data is shared, and whether credit-scoring models treat people with short credit histories fairly.
The hub’s secretariat sits in NRB’s Payment Systems Department.
