Rural Nepal Gets “Smart” With WFP Electronic Cash Transfer System
Published on 4 July 2011

The United Nations World Food Programme Nepal, in partnership with Siddhartha Bank, is piloting a smart card cash transfer system for 484 food-insecure households in Pagnath VDC, in the Mid-West Hills district of Dailekh, through WFP’s Food- and Cash-For-Assets scheme.


DAILEKH, Nepal - 21-year-old Dilsara Thapa has always been grateful to WFP for helping to feed her family of six during the lean season, but on June 15th she had another reason to smile:  Dilsara became one of the first owners of an electronic cash card in her district, as banking facilities reached Dailekh.

In partnership with Siddhartha Bank, WFP is piloting a smart card cash transfer system for 484 food-insecure households in Pagnath VDC, in the Mid-West Hills district of Dailekh, through WFP’s food- and cash-for-asset scheme, implemented with the support of WINROCK.

WFP provides cash in addition to food in areas where food markets exist and function well, but high levels of poverty and food insecurity persist. In exchange for their labour in building community assets such as irrigation canals, rehabilitating farmlands, and cultivating alternative, high-value cash crops – beneficiaries receive food and/or cash to meet their immediate household food needs. Food-insecure households in Nepal on average only produce enough food to cover their needs for three to five months of the year.


"I can't believe that my money is in this small card!" Dilsara said after withdrawing Nepalese rupees (NRs) 1,800 deposited by WFP for her 20 days work on an irrigation project. Beneficiaries like Dilsara receive 2kg of rice, 0.25kg of lentils and NRs 90  (equivalent to US$1.20) per day, for a period of up to 80 working days per year.

The benefits of the smart-card system are three-fold: it reduces security risks, reduces operational costs and encourages people to save. Until now, because of the virtual or complete absence of formal financial institutions in remote regions of Nepal, WFP‘s cooperating partners and beneficiaries have had to transport cash over long distances, often by foot, posing significant security risks to both staff and beneficiaries who carry the cash. Since 2010, WFP has required all cooperating partners to take out cash-in-transit insurance in order to reduce this risk.

Now, WFP can simply credit beneficiaries’ smart cards electronically. Beneficiaries in turn can immediately access their funds by presenting their card to a local Siddhartha Bank agent located in the village, who inserts the card into an electronic card reader and verify the cardholder’s identity with finger print and photo verification.  beneficiary getting his finger scanned

To support user-friendliness, a voiceover device has been customized into Nepali to guide locals through the transaction process. Cardholders can also collect their cash from any Siddartha Bank branch if they wish to withdraw larger amounts. For the pilot period, there will be no charges to beneficiaries for withdrawals, and local agents also receive a commission from the bank for hosting transactions.

Dilsara and her husband used to work as porters in addition to farming their land. “We can never grow enough to eat for the whole year, as most of the time the land remains dry," said Dilsara. “Now I can gradually save the money and educate my children. WFP work opportunities have been a great relief for us.” 

One of the main objectives of this programme is to promote financial inclusion. “The bank wants to reach those segments of the population who have limited access to financial services in the remote areas of Nepal,” said Surender Bhandari, Siddhartha Bank’s CEO. “We find WFP is a partner who will help us extend our services to rural populations, and we value this partnership a lot.”

Siddhartha Bank also  plans to add new services to the smart card platform over time, including mobile phone credit recharge, person-to-person transfers, utility bill payments, and remittance transfers.  woman and young girl posing with their bag of wfp food
“Through our partnership with Siddhartha Bank, supported by funding from the World Bank and the UN Capital Development Fund (UNCDF), we hope to provide a ‘smart’, simple solution for cash transfers and social protection in rural areas of Nepal,” said Nicolas Oberlin, WFP deputy Country Director. “This is an exciting initiative, and if successful the pilot could be up-scaled and expanded to other remote areas of Nepal where WFP operates.”

In 2011, WFP aims to  provide food and cash assistance to one million highly insecure Nepalese people living in the mid and far west hills and mountains.

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About the author

Deepesh Das Shrestha

Public Information Officer

Deepesh Das Shrestha works for WFP as a Public Information Officer.