DIGI Nepal - Digital Innovation for Growth and Inclusion

Nepal faces challenges from its difficult topography which restricts the delivery and access to basic services and entails high costs of doing business. Digital development represents an important potential for accelerating economic growth for Nepal. In recent years, Nepal has established the foundation for digital technology through increased mobile cellular and broadband subscription. In 2018, the government of Nepal published its Digital Nepal Framework, which envisages the adoption of digital technology as growth catalyser. In order to achieve this vision, it puts digital entrepreneurship, improvement of digital service provisions and increased access to affordable digital infrastructure on the agenda.

However, Nepal lags behind in terms of both digital entrepreneurship and innovation. During the COVID-19 pandemic, Nepal witnessed an accelerated adoption of digital technology and increased demand for digital products. Despite the opportunities, private companies alone are hesitant to take the risks and bear the high costs and uncertainties of innovation. In this context, the promotion of digital innovation and the strengthening of a digital ecosystem is timely and relevant. In 2023, the Embassy of Switzerland in Nepal plans a mission of Swiss companies focusing on Fintech. It invites Swiss fintech companies to Nepal to discover the market and to promote business collaboration. The DIGI Nepal project will tap into this opportunity to bring Swiss expertise to Nepal and to facilitate its engagement in the digitalisation of the Nepali economy.

In its first phase, the DIGI Nepal project will facilitate partnerships and provide technical assistance and grant funding to reduce the cost and risks that hinder digital tech providers to innovation.

Direct target group:

-    Private digital technology solution providers (incl. SMEs).

Indirect target groups:

-    Private basic service providers who can adopt innovative digital technology.

-    Women and men, including those from discriminated groups and from beyond the capital, who utilise and consume private basic services.

Expected results:  

Output 1.1:    Digital technology providers (incl. SMEs) develop innovative solutions in the form of business models.

Output 1.:    Digital technology providers (incl. SMEs) pilot innovative solutions in partnership with Nepali, Swiss and international partners.

Results from previous phases:   In the frame of its project Support to Relief and Recovery from COVID-19, the SDC Nepal supported two projects that provided insights on digital innovation: Lessons learnt of the UNCDF project Leveraging Digital Solutions for MSMEs included that the use of e-commerce platforms allows MSMEs to ease customer acquisition, expand customer outreach and increase sales. The project also enhanced MSMEs’ understanding and confidence of using digital technology. The COVID-19 MSME Fund Nepal highlighted the difficulties that technology companies face to access bank loans, and subsequently to invest in the development of new market- relevant solutions. MSMEs who are willing to adopt digital solutions lack technical expertise to identify and implement the right solution.

DIGI Nepal will refer digital solution providers in Koshi Province to services and funds promoted through the Swiss mandated project Udaya.

Digital technology innovations developed through DIGI Nepal will improve services promoted by other SDC projects in Nepal, i.e. NAMDP, TVET projects and global projects like UNCDF’s innovative financial solutions to enhance the development impact of remittances. In return DIGI Nepal will build on partnerships and innovations initiated through these projects. DIGI Nepal will also tap into the experience of openIMIS, which is supported by SDC’s thematic cooperation.