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CPN (Maoist Center) Chairman Pushpa Kamal Dahal and acting Chinese ambassador to Nepal Wang Xin held a meeting at the former’s residence in Khumaltar on Friday. The meeting with a high-ranking official of the Chinese Embassy has been taken meaningfully at a time when Dahal has been expressing his reluctance to leave the post of prime minister. The acting Chinese ambassador expressed his concern over the role of the Maoist Center in the possible power sharing and government formation. In response, Dahal said that he has been working to form a new government under his leadership and he has been holding consultations with the senior leaders of the Nepali Congress for the same. Earlier this week, Wang Xin held a meeting with Rastriya Prajatantra Party Chairman Rajendra Lingden. On the occasion, he discussed a possible scenario of power sharing with Lingden. New Chinese ambassador to Nepal Cheng Song will arrive in Nepal on December 27.

While the proliferation of banks and financial institutions (BFIs) has increased access to finance in Nepal, average Nepalis are still behind when it comes to financial literacy, according to a new Nepal Rastra Bank (NRB) survey. The NRB’s report titled ‘Baseline Survey on Financial Literacy in Nepal’ shows Nepal’s financial literacy score is 57.9 percent which is slightly lower than the average score of the OECD survey. This is the first survey carried out by the central bank to find out the financial literacy status in the country. “This is the first time that the central bank has carried out a survey of this kind in the country. The findings show the level of financial literacy in Nepal is low compared to other countries including India,” said Prakash Kumar Shrestha, Executive Director of NRB, adding, “The survey shows the status of financial literacy in the country and where the interventions required to improve financial literacy are.” The report shows provincial disparity exists in financial literacy scores. Bagmati Province and Gandaki Province have higher financial literacy scores compared to other provinces. Financial literacy among the male population is higher compared to the female population and it is relatively higher in the population residing in metropolitan cities compared to other local-level. According to the report, Bagmati Province stands at the top with a score of 64.5 percent, while Madhesh Province is at the bottom with a score of 52.0 percent. Province 1, Madhes, Lumbini, and Sudurpaschim provinces have financial literacy scores less than the national average. Interestingly, the financial literacy score of Karnali Province is slightly higher than the national average. “It is due to a comparatively higher score in financial behavior and financial attitude of the respondents,” says the report. In terms of gender, men have a better score than women. The report shows financial literacy scores for men and women at 61.8 percent and 54.8 percent, respectively. The gender gap in financial literacy score exists in all provinces, with much a wider gap in Madhesh and Sudurpaschim provinces. Financial literacy differs with age, education, income level, and occupational differences. Young people have a high financial literacy score compared to people of higher age groups. Those with formal education, are employed in the formal sector, and have a higher skill and income level have better financial literacy scores. The adult population employed in the agriculture and construction sectors has a very low level of financial literacy scores. The financial literacy score of the top income group is 68.4 percent compared to just 50.7 percent in the lowest income group. Similarly, salaries/wage employees and self-employed have higher financial literacy scores of 64.2 percent and 63.6 percent respectively, compared to that of housewives (51.2 percent) and unemployed (47.2 percent). "People involved in the formal sector have a higher financial literacy score compared to those involved in the informal sector," reads the report. The higher score in the younger generation and increasing adult literacy rate, according to the report, shows a better prospect for financial literacy and increasing demand for financial services in the days to come. The central bank study finds a financial knowledge score of 47.3 percent at the national level. Of the seven basic concepts within financial knowledge, the survey has found that the concept of division and interest is relatively well understood by the respondents. However, assessing the impact of inflation and interest on purchasing power, simple and compound interest calculation, the relation between risk and return, and the impact of diversification on risk are relatively less-known subjects among Nepalis, according to the report. Given the relatively low score, the report suggests there is a big scope to improve financial literacy by targeting specific places, gender, and groups. “The female population and Madhesh Province need special intervention for increasing financial knowledge, though other Provinces also need similar types of intervention,” says the report. Since the usage of payment, saving, insurance, and credit is still lower in rural areas and especially in the female population, unemployed people, housewives, and unskilled people, the report says efforts on broadening financial literacy and availability of products should be made targeting these groups. The survey finds that 73.78 percent of adult populations use payment products such as mobile banking, internet banking, credit card/debit card, saving and current account, and digital wallets. Bagmati (85.62 percent) and Gandaki Province (84.88 percent) have the highest proportion of the adult population using payment products. The young generation has a higher usage of payment products than elderly people. About 79.84 percent people aged 18 to 30 years use payment products compared to 68.82 percent of people of 60 years and above. Anil Kumar Upadhyay, CEO of the Agriculture Development Bank said that the survey has given a detailed picture of the gap in financial literacy. “Since it has carried out a detailed gap analysis, it will help us to focus our efforts in the coming days,” said Upadhyay. Financial literacy in Nepal  

• Nepal’s financial literacy score is 57.9 percent.
• Bagmati Province and Gandaki Province have higher financial literacy scores compared to other provinces.
• Madhes Province scores the lowest in financial literacy score.
• The financial literacy score of men is higher than women by 7.5 percentage points.
• About 73.78 percent of adults use the payment product, 86.64 percent use saving, investment, and retirement products, 46.34 percent use credit products and 30.2 percent use insurance products.
• About 66.97 percent of adult populations are aware of at least 5 financial products.
• About 71.83 percent of the population rely on family and friends for saving or borrowing to meet their financial needs.
• Bagmati Province has the highest usage of payment products.
• Karnali Province has the lowest usage of bank loans.

For the first time in the Nepali life insurance sector, two life insurance companies—Surya Life Insurance and Jyoti Life Insurance—have completed their merger and started integrated business on Thursday. The new entity formed after the merger has been named Suryajyoti Life Insurance Company. Surya Life and Jyoti Life decided to go for a union after Nepal Insurance Authority increased the paid-up capital for life insurance companies to Rs 5bn and non-life insurance to Rs 2bn. The two companies had signed a memorandum of understanding (MoU) for the merger in the last week of June. Post-merger, Suryajyoti will have paid up capital of Rs 4.54bn. This is the first merger among the life insurance companies in the country. While other life insurance companies have also signed merger agreements, they are yet to complete the merger process. There have been two successful mergers in the non-life insurance business. In July, Himalayan General Insurance and Everest Insurance merged to form Himalayan Everest Insurance Insurance Co. Ltd. Similarly, in October, Sanima General Insurance and General Insurance Company merged to form Sanima GIC Insurance Ltd.  

The price of gold has dropped by Rs 1, 200 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 100, 300 per tola today. It was traded at Rs 101, 500 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 99, 800 per tola today. Similarly, the price of silver has decreased by Rs 15 and is being traded at Rs 1, 390 per tola.

A fierce dispute has erupted between the Nepali Congress and the CPN (Maoist Center) on who will become the prime minister in the first phase. The Congress leaders have been trying to convince Maoist Center Chairman Pushpa Kamal Dahal after he expressed his reluctance to leave the prime minister in the first phase. NC leader Prakash Man Singh reached Khumaltar on Friday to hold a discussion with Dahal on the same issue. It has been learnt that Prime Minister Sher Bahadur Deuba sent Singh to Khumaltar to discuss with Dahal on his side. Deuba has been trying to persuade Dahal through various ways but Dahal is adamant on his stance of not quitting the post. During the meeting held this morning, Singh told Dahal that Deuba should be made the prime minister in the first phase. Congress leader Singh had said that they would share other posts in consensus after making Deuba the prime minister. But, Dahal said that national and international agencies are on his side and decided not to leave his stand of being the prime minister in the first phase. “You are all aware that we are also having discussions with the CPN-UML. Deubaji is still the prime minister. I will be the prime minister now and Deuba will become the prime minister after two years,” a leader said, quoting Dahal. During the meeting with Singh, Dahal warned that a crisis could emerge in the coalition if he did not become the prime minister in the first phase from the ruling alliance.

The government has endorsed the Trade Logistics Policy 2022, targeting to reduce the costs for both internal and external trade. Narayan Prasad Regmi, Spokesperson of the Ministry of Industry, Commerce and Supplies (MoICS), said the government has introduced the policy in order to build trade related infrastructure. “This will help reduce trading costs of entrepreneurs,” he said. The new policy has identified three objectives and 13 strategies, which are mainly related to the development of trade related infrastructure, service and good governance. There are more than three dozen government agencies and private organizations that are associated with facilitating the country’s trade. However, lack of coordination among these agencies and poor infrastructure has led to the duplication in investment in a number of cases, while traders suffer for not having the necessary logistics in others. The policy has envisioned developing Nepal as an economic corridor through the development of various transport networks. For effective implementation of the policy, a 14-member task force has been formed under the MoICS secretary. The policy aims at constructing and operating trade related infrastructure in an integrated way. To facilitate domestic and foreign investment to build such infrastructure, coordination with stakeholders to improve the quality of trade infrastructure, capacity building of the service providers, increase access of micro, small and medium industries in trade logistics, use of innovative technologies to enhance supply chain and development of a master plan for construction of infrastructure for integrated trading system. Traders and freight forwarders however criticized the newly enforced policy, saying that it has floated vague ideas and has failed to address the underlying real problems in the country’s domestic and international trade. “Most of all, it has been developed just to please donor agencies and imposed unilaterally by ignoring the inputs provided by the stakeholders,” said a freight forwarder operator on condition of anonymity. In lacking trade logistics, traders have been facing excessive costs for transit, transport, delivery, storage and official procedures. On average, the traders have to bear around 28-32 percent more costs on top of the purchase price of the goods. According to the experts, the policy has failed to address the issues related to intermodal, and multimodal warehouses, among others, which are the key issues for reducing the costs of trading. “Rather than realizing the country-specific requirements, the policy represents an imitation of the policy implemented in other countries,” the source said. Currently, the importers are required to pre-inform the authorities concerned about the mode of importing goods, whether it is a railway or roadways. However, the policy does not talk about providing freedom to importers to change their decision in between. “Even the cargo transport routes and selling destinations cannot be altered other than the previously mentioned,” an importer said. According to the trader, the policy fails to talk about warehouse provision. “There is no clarity regarding the provision of bonded and non-bonded warehouses and related tax issues, which are the crucial parts of trade logistics.” In 2016, the World Bank in its report titled ‘From Evidence to Policy: Supporting Nepal’s Trade Integration Strategy underlined the role of improved trade logistics for the Nepali economy. It looked at Nepal’s current participation in global markets and made recommendations on how the country can increase trade integration and boost its economy. The report suggests that Nepal is in dire need of an economic transformation, which would require a shift away from remittance-fueled growth to growth driven by productivity and investment.

Amid the continuing bearish run in the domestic stock market, share prices of 25 companies have fallen below Rs 200 in the Nepal Stock Exchange (Nepse). On Thursday, the last trading day of the week, shares of 14 hydropower companies and 10 commercial banks were traded below Rs 200. The share price of Global IME Bank dropped to Rs 198.50 while the stocks of Sunrise Bank and Bank of Kathmandu fell to Rs 181 and Rs 197, respectively. Similarly, the share price of Kumari Bank has plunged to Rs 181, Prabhu to Rs 185.2, Citizens Bank to Rs 176, Century Commercial Bank to Rs 178.5, Mega Bank to Rs 187, NCC Bank to Rs 176.7 and Laxmi Bank to Rs 189.5. Of these 10 banks, Sunrise and Laxmi Bank have announced that they will not distribute dividends this year. The same is the story of hydropower companies. As banks tightened the margin loans following directives from the Nepal Rastra Bank, the hydropower sector that recorded the highest gain in the last bull run, is now going through a lean patch. Till one year ago, hydropower was one of the most preferred sectors of domestic investors as share prices of hydropower companies rose to new highs. On Thursday, the Nepse index decreased by 0.01 points to close at 1867.21 points. With parties now exploring new government formation, the investors also are in 'wait and watch' mode. With banks' interest rates still on the higher side and the liquidity crunch still continuing, investors are not in the mood for making new investments in stocks till new government formation. Box Companies whose share prices are below Rs 200

CPN (Maoist Center) Chairman Pushpa Kamal Dahal is likely to lead the new coalition government.

According to sources, Nepali Congress President and current Prime Minister Sher Bahadur Deuba has tentatively agreed to hand over the government leadership to Dahal for 2.5 years, after which the former will become the prime minister.

It is almost agreed that NC will get the president and Maoist prime minister, while discussions aimed at forming provincial governments are underway, said a top NC leader requesting anonymity.

CPN (Unified Socialist) and other fringe parties are ready to support Dahal for securing majority votes in the parliament.

On Thursday, Maoist party selected Dahal as the party's parliamentary party leader. A Maoist leader said as parties have agreed to keep the current coalition intact, sharing of major positions among its members is natural.

From Thursday evening, current coalition partners are in intensive discussion to finalize the power-sharing deal.