Why the Financial Stimulation Model is a Game-Changer for Public Schools in Nepal
High absenteeism and dropout rates remain persistent challenges in public schools across Nepal, significantly hindering the country’s educational aspirations. The government economic survey report show, out of 100 students enrolled in grade one, 36 students leave their study by the time they reach grade 10.1
While socio-economic conditions certainly play a role, the core of the problem lies in the deteriorating quality of education, crumbling infrastructure, and a system that fails to engage young minds meaningfully.
Parents are rapidly losing faith in a system that offers little more than a certificate—one that neither equips students with life-ready skills nor ensures academic competence. According to the Ministry of Finance (2019), only 71% of students complete basic education, and a mere 22% make it through grade twelve. The recent SEE results paint an even grimmer picture: out of 464,785 students, over 50%—a staggering 242,313—were “non-graded,” failing to secure any academic standing. These numbers are not just statistics; they are a wake-up call.2
But academic failure is only the tip of the iceberg. In many remote public schools, we have observed that students attend classes without basic hygiene, often skipping sessions after lunch. The lack of student retention in the second half of the school day is alarming. On top of that, systemic issues—ranging from politically entangled or absentee teachers, to insufficient resources and fragile infrastructure—compound the problem.
In such a mundane educational landscape, the Financial Stimulation Model (FSM) offers a breath of fresh air. It is not just another educational intervention—it is an innovative, cost-effective behavioral change model grounded in positive reinforcement.
FSM is more than just a model — it’s a movement. It brings financial literacy, positive reinforcement, and essential life skills into classrooms in a joyful and impactful way. Through consistent class participation and a unique reward system, FSM supports student well-being, celebrates achievement, and nurtures responsible decision-making and saving habits within a circular, student-centered model.
Here’s how it works:
This circular model consists of three key components.
- The Behavior Chart (The Foundation):
Behavior charts in each classroom will serve as a powerful tool for students to witness their own growth. Teachers will uplift and guide them, promoting or gently correcting based on their commitment to areas like attendance, homework, hygiene, respect, and participation. Students will earn points — 15 for excellence, 5 for average effort — inspiring them to take charge of their own future.
This chart evolves into more than just a tool; it becomes a foundation that sparks a deep sense of responsibility and pride in each student, empowering them to carve their own future through dedicated effort, wise choices, and unwavering belief in their own potential.
- The FSM Marketplace (The Reward):
At the end of each month, the points students earn will be transformed into tokens, giving them a sense of ownership and pride. The school will set up a mini-market, filled with school supplies, toys, and treats — all within reach thanks to their hard work.
Through this, students will not only learn the power of choice, but also the true value of money, the importance of self-control, and the joy of earning something through their own effort.
- The Token Bank (The Lesson):
If they choose not to spend every earned token on unnecessary treats, avoiding impulsive buying and learning to prioritize needs over wants, students can save their tokens in the token bank, earning 20% interest next month.
This simple act teaches them the power of saving, goal-setting, and planning for the future. It instills vital life skills that will help them develop responsible consumption habits — bridging a crucial gap for those living below the poverty line, and empowering them to break free from the cycle of poverty.
Everything is real—forms, transactions, and the joy of ownership.
Circular model of FSM puts forward positive reinforcement, students are motivated, challenged, and encouraged to attend school regularly, maintain personal hygiene, complete homework consistently, demonstrate positive behavior, and actively participate in extracurricular activities.
What makes FSM truly game-changing is its ability to turn public schools from passive spaces into active learning hubs.
https://kathmandupost.com/national/2021/05/30/school-dropout-remains-a-challenge-survey-report-shows
https://www.myrepublica.nagariknetwork.com/news/challenges-facing-the-nepali-education-system
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