Remittances and Digital Banking in Nepal: Trends and Impacts

Nepal is a country which is closely related to remittances and migration. As a nation, Nepal is highly reliant on the cashflow generated through remittance and thus serves as a lifeline to the Nepalese economy, with 1/3 of the household income being from remittance contributing to 23% national GDP in 2019. These huge cash inflows have changed how the average Nepalis consume and invest. However, the burning question remains; Can Nepal keep on relying on these remittances to support its economy or is there a much-needed shift in the perspective of income? Using various sources of secondary data according to Nepal Living Standards Survey (NLSS III 2010/11) and Household Risk and Vulnerability Survey of 2018 and various other researches, this article investigates the role of remittances in household spending, digital financial services and investment behavior of Nepalese and their economy.