In Brief: BFI Associations sign banking agreement to facilitate housing subsidy distribution

Banking agreements fascilitate housing subsidy

May 30, 2016. Three banking and financial institutions (BFI) associations and the Government of Nepal (including the Ministry of Finance and the National Reconstruction Association) signed a standard banking service agreement and memorandum of understanding (MoU). These are key steps in moving forward on efficient, transparent, accountable and widespread distribution of the subsidy component of the Earthquake Housing Reconstruction Program.

For ease and transparency, each beneficiary will receive each of the three tranches of the subsidy payment via a personal bank account. This means that payment comes from the central government and that the flow of funds is fully traceable and distribution is transparent. In addition, the program is helping beneficiaries to formally engage in banking activities, less common in rural areas of Nepal. With the standard banking service agreements in place, the program is laying the groundwork for scaling the distribution of housing grants to beneficiaries.