Urban poverty in Nepal


What are the issues and trends in relation to urban poverty in Nepal? Include data on key trends as well as a qualitative overview of the issues pertaining to informal settlements, housing and access to services that make poor people more or less vulnerable to hazards.


In presenting urban poverty trends and data in Nepal, key findings include:

  • Urban poverty is becoming more pervasive in Nepal: The poverty rate is increasing in urban areas, whilst it is declining in rural areas (ADB, 2013; UNDP, 2014).
  • Urban poverty rates vary substantially across Nepal: Urban areas in the hill ecological zone are the least poor with a poverty incidence of 8.7 per cent. This increases to 22 per cent in urban parts of the Tarai, whilst Kathmandu has a poverty rate of 11.5 per cent (CBS, 2012).
  • Informal settlements are a relatively new phenomenon in Nepal and there is a poor understanding of the overall context of slums and squatter settlements (UN, 2013). The key trends are that:
    • Informal settlements are increasing in number and growing in population: The slum population as a proportion of the urban population increased in absolute numbers from 1.2 million in 1990 to 3.1 million in 2009, before reducing again to 2.8 million in 2014 (UNSD, n.d.). Squatter settlements are rising in fast-growing cities such as Kathmandu and Pokhara, as well as in urban areas such as Dharan, Birganj, Bharatpur and Mechinagar (MoUD, 2015).
    • Increasing urban land and house prices are contributing to the growth of squatter settlements: The housing problem is particularly acute in the Kathmandu Valley (UN-HABITAT, 2010: p. 40).
  • The urban poor are vulnerable to natural hazards because of the location of informal settlements in marginal areas, the poor quality of housing, and the lack of assets to assist in their recovery.

In addition, the paper identifies several dimensions of poverty that impact upon the vulnerability of the urban poor, including:

  • Property rights and security of tenure
  • Access to infrastructure and public utilities
  • Health
  • Social exclusion
  • Crime and violence

Further, the paper argues that a number of factors contribute to increasing the resilience of the urban poor. Social organisation within informal settlements, local level initiatives and self-help schemes are helping to reduce vulnerability of the urban poor. Squatters are relatively organised in demanding their rights (UN, 2013: p. 83), whilst locally established saving and credit groups and cooperatives are providing access to credit and financial assets (Dahal, 2011). Government policies on urban poverty and informal settlements do not directly address the issue of land tenure (UN, 2013), and no policy exists to prevent unnecessary evictions and violations of housing rights (UN-HABITAT, 2010: p. 59). There is a lack of public investment in slums and squatter areas, and housing development trends in Kathmandu largely ignore the urban poor (Shrestha, 2013; UN, 2013).


Suggested citation

Bakrania, S. (2015) Urban poverty in Nepal (GSDRC Helpdesk Research Report 1322) Birmingham, UK: GSDRC, University of Birmingham.