ADB, Japan to Reduce Poverty in Nepal's Disadvantaged Communities

News Release | 7 April 2011

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and the Government of Japan are providing assistance to develop new livelihood opportunities and improve income in some of Nepal's poorest and most disadvantaged communities.

A $2.7 million grant from Japan Fund for Poverty Reduction, administered by ADB, will be used to support targeted and sustainable development programs for marginalized groups including the Dalits and Hill Janajatis, who have the highest poverty rates in the country.

"The goal of this initiative is to reduce both income and non-income poverty and to empower disadvantaged groups in the target districts," said Paolo Spantigati, Principal Country Specialist at ADB's Nepal Resident Mission.

Ethnic minority groups often face difficulties in accessing the benefits of government's development efforts. As marginalized communities, they struggle to assert their rights in decision making and have missed out on mainstream efforts to create new livelihood opportunities.

The project will fund a series of activities to address these obstacles, including training for village members to produce community action plans which will be used to identify viable income-generating activities. Skills training will be given to one family member from each of the 2,000 poorest households in the target communities to help them start micro-businesses, with a revolving seed fund of $300,000 established for this purpose. Another $100,000 will be set aside to support larger business ventures for communities, where there are prospects for high returns.

Given past difficulties in including marginalized groups in development activities, the project will incorporate several innovative features, including a strong focus on social empowerment, including awareness campaigns to overcome discrimination. It will also take a broader approach to livelihood development which goes beyond mere skills training to include access to finance, and support for links to markets. A key component will be empowering women, with targets set for their involvement in community courses and entrepreneurship training.

Along with Japan's contribution of $2.7 million, the Government of Nepal will provide non-cash assistance of $60,000 with beneficiary communities contributing nearly $20,000 in kind for a total project cost of almost $2.8 million. The Ministry of Local Development will be the executing agency for the project, which will be implemented over 4 years.