Publications

	Table of Contents
p. 10 of 18 BACK | NEXT Executive Summary I. Introduction II. Long-Term Vision and Strategy for ADF III. Operational Priorites IV. Use of ADF VII Resources to Date A. Bangladesh: Sundarbans Biodiversity Conservation B. Bhutan: Financial Sector Intermediation C. Nepal: Rural Microfinance D. Lao PDR: Basic Education for Girls E. Kyrgyz Republic: Flood Emergency Rehabilitation F. Pacific DMCs: Partnerships with the Bank V. Financial Management VI. Conclusions

Asian Development Fund VII: Progress Report (1999) : IV. Use of ADF VII Resources to Date

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C. Nepal: Rural Microfinance

43. The donors have emphasized the importance of projects targeted at reaching the very poor and disadvantaged through microfinancing. The third project example is one targeted specially at women among the rural poor. The Bank approved the ADF Rural Microfinance Project loan to Nepal for $20 million in 1998.¹⁶ The project will help achieve the objectives of the recently adopted Agriculture Perspective Plan, which forms the basis for both Bank and Government development programs, to increase participation of women and to reduce poverty by about 35 percent over a 20-year period. Women’s access to microfinance is very limited, and households headed by women, in particular, depend mainly on moneylenders. Institutional credit to the poor constitutes only 24 percent of the total, and most funds go to nonpoor households that have collateral. There is a need to coordinate and streamline the delivery mechanisms for microcredit in a financially viable and sustainable way. The Government’s microfinance operations need to be consolidated so that the Government can properly monitor, supervise, and regulate the sector.

44. The project aims to improve the socioeconomic status of women and increase employment opportunities and microenterprise development through the provision of rural financial services, including a revolving line of credit to finance viable farm and off-farm economic activities. The project will also support a program to improve women’s investment opportunities and skills and strengthen the institutional and financial capabilities of microfinance institutions.

45. The project is expected to benefit about 270,000 households, of which 75-80 percent of the beneficiaries will be poor women, and the remainder will be men and women near the poverty line. Households headed by women will be particularly targeted. About 448,000 loans will be provided for farm and nonfarm income-generating microenterprises. The employment-generating impact will comprise additional full-time employment and part-time work. The project subloans will reach some of the poorest and most disadvantaged sections of society, primarily women, the landless, disadvantaged ethnic communities, and subsistence farmers. The project will also help beneficiaries undertake more productive microenterprises, and thereby improve their incomes, access to decision making, and status in the household and community.

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