The study aims to provide viable policy suggestions for the Government of Nepal and other stakeholders on utilizing productive use of remittances in four productive sectors: renewable energy, high-end agriculture, high-end tourism, and information technology. Nepal is set to graduate from the least-developed country (LDC) classification by 2026. Following graduation, the nation will face restricted access to external financial resources, such as global concessional funding and specialized support programs designated for LDCs. Nepal must proactively devise and implement effective strategies to counter this financial shortfall that leverages remittance in the country’s productive sectors. The study takes the comparative insights from Bangladesh and Sri Lanka. It highlights successful approaches to utilizing remittance in productive sectors such as Bangladesh’s Probashi Kallyan Bank (offering reintegration loans) and Sri Lanka’s remittance-linked financial products, which provide actionable lessons for Nepal.
The study concludes by calling for coordinated efforts across federal, provincial, and local governments to diversify Nepal’s economy, mitigate risks associated with its upcoming graduation from Least Developed Country (LDC) status, and maximize the long-term economic impact of remittances.
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