There was a time when the private sector used to be described as a sector that focuses solely on profit making. Lately, the private sector is being considered globally as an important stakeholder in solving social problems as well. We can see instances of private sector enterprises and entrepreneurs involved in several social works in various countries in addition to their commercial success.
In the mid-90s, the European corporate sector initiated collective campaigns to address the issues of unemployment and exclusion under the banner of Corporate Social Responsibility (CSR) in response to the request made by the President of the European Union. As part of the campaign, a commission was formed in 2000 and it worked to make the CSR campaign wider, more systematic, and participatory. Various universities were brought on board as partner institutions for the purpose. This made a positive contribution to the society, the private sector, and the national economy. Now, CSR activities undertaken in European countries are considered exemplary across the world.
Lately, the participation of the private sector has been expanding in various sectors of the society. CSR activities have been carried out as charity and as a host of activities contributing to the upliftment of society.
Nabil Bank is one of the leading institutions that has been carrying out various activities to develop social entrepreneurship and sustainable banking, which have emerged as different campaigns in the banking sector of the country.
Nabil School of Social Entrepreneurship
Nabil Bank insists that its recently-launched Nabil School of Social Entrepreneurship (Nabil SSE) is a different and new type of non-profit initiative which aims to expand social entrepreneurship nationwide. Under this initiative, the bank has started a Fellowship Programme commencing from the third week of March 2022. Under this programme, a public call was made to submit concepts on social entrepreneurship. From among 350 applicants, 20 of the most competitive applicants were selected, who are now being trained on social entrepreneurship for a year free of cost.
According to Nabil Bank, this programme aims to link Nepal’s higher education with the country’s most prominent private-sector bank in order to create successful social entrepreneurs. Under this campaign, Nabil Bank said it is starting another Certificate Level Programme in all seven provinces of the country.
Nabil SSE – Certificate Level Programme
Nabil Bank informed that a curriculum is being prepared in coordination with various colleges from all seven provinces. Under this programme, an ambitious target of creating 700 entrepreneurs - 100 in each province, has been set. Nabil Bank has also set up an office in partnership with the Faculty of Management under Tribhuvan University to make this campaign systematic, sustainable, and institutionalized. The main objective of Nabil’s move to promote social entrepreneurship is to contribute to social transformation through the development of social entrepreneurship and to address social problems. This move of the bank aims to identify new ideas on social entrepreneurship from the community level and attract investment to materialize the idea into practices.
Nabil SSE also aims to run social campaigns to develop new ideas, the bank further said adding, “With its own investment, Nabil SSE aims to develop social entrepreneurs and establish a tradition of solving social problems through social entrepreneurship.”
Nabil Bank said it has been involved in social work since a long time along with its commercial success. Nabil Bank claimed that it contributed Rs 60 billion to the government’s COVID-19 relief fund in 2020 and also helped establish an oxygen plant at Bir Hospital at a time when the entire nation was suffering from shortage of oxygen during the pandemic. Nabil Bank has been contributing to the society through such types of CSR interventions. But now, the bank says it has moved ahead with a new model of social service through social entrepreneurship development.
It is a novel initiative in the banking sector. The bank believes that the success of this endeavor will help establish a new culture of entrepreneurship development in the country and in turn, solve social problems.
Sustainable Banking: A Distinct Initiative
“Sustainable Banking is a new identity of Nabil Bank,” says the bank. The bank has set up a new unit ‘Sustainable Banking’ and has carried out model work at several places in the country. The bank announced the programme regarding Sustainable Banking, which aims to enable excluded classes to receive loans at cheaper rates for their enterprises. This will contribute to developing an inclusive economy in the country.
For this purpose, the bank says it has been investing in sustainable business development in coordination with various state agencies and development stakeholders. The bank aims to provide services to people deprived of access to finance, and to promote entrepreneurship in remote villages through sustainable banking initiatives. The bank has also been working on promoting micro-enterprises by aligning its works with the Sustainable Development Goals (SDGs) set by the United Nations. Under the Sustainable Banking initiative, a farmer can get a loan up to Rs 1.50 million personally, up to Rs 2.50 million institutionally, and up to Rs 500,000 collectively as a group, according to the bank.
Under the Nabil Entrepreneurship Credit Scheme, people aged 18-60 years can get loans in the range of Rs 100,000 to Rs 10 million. Dozens of people have already started new businesses by availing loans from Nabil Bank under this scheme.
However, the scope of Nabil Bank’s Sustainable Banking is much larger. The bank has expanded financing under this scheme to achieve the SDGs. It has also commenced maintaining an account of carbon emissions to examine how the enterprises financed by the bank have contributed to reduce carbon dioxide emission.
The bank says it has been expanding its credits in areas of renewable energy in coordination with the Alternative Energy Promotion Centre. It is the bank’s initiative to minimize the impact of climate change in the country by supporting development of micro hydro projects and other sources of renewable energy. Nabil Bank is also a member of the UK-based Partnership for Carbon Accounting Financials (PCAF), an institution that helps in keeping accounts of the contribution of the bank’s financing in the areas of climate and environment. Nabil Bank informed that it will also work in the area of carbon financing through this agency. The bank has also started a ‘Remit Forestation’ programme to highlight the contribution of remittances sent by Nepali migrant workers. This banking initiative is expected to help promote the spirit of sustainable development and minimize the impact of climate change.
Social Entrepreneurship for Achieving National Goals
The United Nations has already endorsed a proposal of graduating Nepal into a developing country from a least developed country in 2026. There are three criteria for graduation—per capita Gross National Income (GNI), Human Assets Index (HAI), and Economic Vulnerability Index (EVI). Nepal is yet to meet the criteria related to per capita GNI. In order to graduate into a developing country, an LDC should have per capita GNI of at least $1,230 but presently, it is tentatively $1,100 in the case of Nepal. The country is facing an additional challenge of meeting the GNI criterion because of the impact of the COVID-19 on people’s earnings, the bank further said. Therefore, it is not possible to meet the GNI target without the growth of economic activities through the development of new enterprises. “We need to take steps that help the State achieve sustainable and inclusive economic development,” said the bank.
Poverty alleviation, employment generation, and economic equality are the important pillars for national development, according to the Sustainable Development Goals (SDG). This is in line with the country’s 15th periodic plan (2019-20—2023-24) and 25-year Long-Term Vision Paper. The 8th Sustainable Development Goal emphasizes on enhancing people’s access to Banks and Financial Institutions for creating sustainable employment and promoting economic activities. According to the bank, the goal focuses on the need for enhancing the capacity of financial institutions as well as expanding their services. The new endeavors initiated by Nabil Bank for social entrepreneurship development and Sustainable Banking are aligned with the country’s national development goals and objectives. Nabil Bank informed that it has proactively taken initiatives in the banking sector, which has also inspired others to do the same to help achieve common national development goals.
Encouragement to Develop Small Enterprises
As per the government’s statistics, more than 18 percent of the population are living below the poverty line. Furthermore, the COVID-19 pandemic is estimated to have pushed more people under the poverty line. Unemployment rate in the country is over 11 percent. “Our national plan and SDGs have called for addressing these problems along with many other social issues through partnerships and coordinated efforts.”
Nabil Bank informed that it has adopted the policy of processing loans for Small and Medium Enterprises (SMEs) as quickly as possible to help promote such enterprises. It is part of the bank’s belief that inclusive banking is essential to promote an inclusive economy. The bank has forged partnerships with various agencies for this purpose. For instance, the bank has started a new banking access programme in coordination with the United Nations Capital Development Fund (UNCDF) to connect youth and women entrepreneurs with the banking service. Under this scheme, the bank expects hundreds of thousands of women and youth entrepreneurs to be connected, thereby contributing to promote inclusive banking and economic development.
Nabil Bank said it has also forged a partnership with Daraz, an online shopping site under which, the bank has started providing credits to small businesses as per the recommendation of Daraz. The bank has also been extending credit in the agriculture sector and helped develop farming technology in the sector in coordination with various institutions and companies. In addition to this, the bank is also promoting gender equality by extending credit to women entrepreneurs based on the recommendation of the Federation of Women Entrepreneurs Associations of Nepal. These endeavors have emerged as win-win situations for both borrowers and the bank as they helped new people to engage in businesses and helped the bank diversify its investment portfolio.
These are some of the instances whereby Nabil Bank has not confined its job to banking business alone, but has also been engaged in running social and economic campaigns.
As Nepal's first private sector bank, Nabil Bank has continued to remain the leading bank in the country.
“Its focus on inclusive banking to promote economic development and development of enterprises, along with its emphasis on increasing people’s access to finance have enhanced the bank’s public image too. The new endeavors of Nabil Bank are also expected to inspire other banks to follow suit.”
The bank says that the areas where Nabil Bank is expanding credit could be the areas where other banks can also find opportunities to expand their credit in the future.
Nabil Bank believes that the wider programmes that the bank launched in coordination with the government, development partners, business enterprises, and professional organizations could stimulate other banks to find new areas of investments and ways to expand investment in social entrepreneurship.
“The multi-stakeholder partnership including universities, national and international agencies, has contributed to explore innovations in the banking sector, which has separated Nabil from the remaining banking institutions of the nation.”