fbpx 53144-001: Rural Enterprise Financing Project | Asian Development Bank

Nepal: Rural Enterprise Financing Project

Sovereign (Public) Project | 53144-001 Status: Proposed

The project will promote and finance commercial agribusiness enterprises collective owned by small farmers (collective enterprises) and individual small enterprises (individual enterprises) through Small Farmers Development Bank (SFDB), an apex development bank owned by Small Farmers Agriculture Cooperatives (SFACs). SFDB provides wholesale loans to SFACs; then SFACs relend to their small famer members. Under the project, SFACs will relend the loan proceeds to their members' collective enterprises and individual enterprises.

Project Details

Project Officer
Mayumi Ozaki South Asia Department Request for information
Country
  • Nepal
Sector
  • Finance
 
Project Name Rural Enterprise Financing Project
Project Number 53144-001
Country Nepal
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Rural Enterprise Financing Project
concessional ordinary capital resources lending / Asian Development Fund US$ 50.00 million
TA: Rural Enterprise Financing Project
Technical Assistance Special Fund US$ 500,000.00
Financial Sector Development Partnership Special Fund US$ 250,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance / Inclusive finance - Small and medium enterprise finance and leasing

Gender Equity and Mainstreaming Gender equity
Description The project will promote and finance commercial agribusiness enterprises collective owned by small farmers (collective enterprises) and individual small enterprises (individual enterprises) through Small Farmers Development Bank (SFDB), an apex development bank owned by Small Farmers Agriculture Cooperatives (SFACs). SFDB provides wholesale loans to SFACs; then SFACs relend to their small famer members. Under the project, SFACs will relend the loan proceeds to their members' collective enterprises and individual enterprises.
Project Rationale and Linkage to Country/Regional Strategy

Rural poverty in Nepal is associated with (i) low productivity and limited return in the agriculture sector, and (ii) limited rural off-farm employment opportunities. Low productivity and limited return in the agriculture sector are attributed to (a) small and fragmented landholdings; (b) limited technology application; and (c) limited agriculture commercialization. Ineffective government policies and programs as well as underdeveloped rural infrastructure and limited access further hamper rural poverty reduction.

To reduce rural poverty, it is necessary to transform the current subsistence nature of agriculture activities into value-added commercial activities. Such transformation will require external assistances including capacity building, business facilitation, financing and possibly, risk-sharing such as guarantees. The project will facilitate small farmers' commercialization with financial intermediation along with value chain development support.

Impact Socioeconomic transformation achieved to reduce poverty level through employment oriented economic activities (14th Three Year Economic Plan, 2017 2019)a
Outcome Small farmers engaged in rural enterprises and their incomes increased
Outputs

Collective enterprises established and operationalized

Individual enterprises financed and expanded

Rural enterprise financing capacity enhanced

Geographical Location Nation-wide
Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The nature of procurement involved under the subprojects shall be simple commodities that can be either procured directly or based on best commercial practices. SFDB has completed two projects with ADB and has reasonable capacity to implement such projects, accordingly, the procurement is categorized as B. Procurement by rural enterprises, if any, will be in accordance with the established private sector or commercial practices acceptable to ADB, as required in ADB's Procurement Policy (2017, as amended from time to time), Procurement Regulations for ADB Borrowers (2017, as amended from time to time), and Staff Instructions ADB Administrated Consulting Services.
Procurement The nature of procurement involved under the subprojects shall be simple commodities that can be either procured directly or based on best commercial practices. SFDB has completed two projects with ADB and has reasonable capacity to implement such projects, accordingly, the procurement is categorized as B. Procurement by rural enterprises, if any, will be in accordance with the established private sector or commercial practices acceptable to ADB, as required in ADB's Procurement Policy (2017, as amended from time to time), Procurement Regulations for ADB Borrowers (2017, as amended from time to time), and Staff Instructions ADB Administrated Consulting Services.
Responsible ADB Officer Mayumi Ozaki
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
The Government of Nepal
Singha Durbar
Kathmandu, Nepal
Timetable
Concept Clearance 29 May 2019
Fact Finding 09 Jun 2019 to 15 Jun 2019
MRM 07 Aug 2019
Approval -
Last Review Mission -
Last PDS Update 30 May 2019

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Title Document Type Document Date
Rural Enterprise Financing Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis May 2019

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.