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

Nepal: Rural Enterprise Financing Project

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

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
Ozaki, Mayumi South Asia Department Request for information
Country
  • Nepal
Sector
  • Finance
 
Project Name Rural Enterprise Financing Project
Project Number 53144-001
Country Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3856-NEP: Rural Enterprise Financing Project
concessional ordinary capital resources lending / Asian Development Fund US$ 50.00 million
TA 9853-NEP: Capacity Development for Rural Enterprise Financing
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 Employment-oriented economic activities increased (14th Three-Year Development Plan, FY2017 - FY2019)a
Project Outcome
Description of Outcome Small farmers' engagement in rural enterprises increased
Progress Toward Outcome Ongoing implementation
Implementation Progress
Description of Project Outputs

Collective enterprises developed and financed

Individual enterprises promoted and financed

Rural enterprise financing capacity enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Ongoing implementation

Geographical Location Nation-wide
Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects The project's environmental due diligence found SFDB financed subprojects are category C. However, not to exclude the potential of category B subprojects, the implementation of ESMS is made mandatory under the project. For category B subprojects, an initial environmental examination including environmental management plan is required.
Involuntary Resettlement The project will finance only subprojects that does not trigger any involuntary resettlement.
Indigenous Peoples The project can have positive impacts for indigenous peoples (IP) by providing them access to finance. If IP is triggered, SFDB will follow ESMS and ADB's requirement for IPs.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation ADB will disseminate information about this project and its outcome through publications, presentations, and on its website. ADB will also communicate with project's internal stakeholders through written documents.
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 Ozaki, Mayumi
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
[email protected]
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 11 Nov 2019
Last Review Mission -
Last PDS Update 14 Dec 2020

Loan 3856-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Nov 2019 10 Dec 2019 03 Jun 2020 30 Jun 2025 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 50.00 11 Nov 2019 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 11 Nov 2019 5.00 0.00 10%

TA 9853-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Nov 2019 04 Dec 2019 04 Dec 2019 31 Dec 2024 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 0.00 0.00 0.00 0.00 0.00 750,000.00 11 Nov 2019 30,960.20

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

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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.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Environment and Social Safeguards Specialist Individual - Consulting Closed 11 Jun 2020 17 Jun 2020
Agribusiness Finance Specialist Individual - Consulting Closed 12 Feb 2020 14 Feb 2020
Project Implementation Unit Coordinator Individual - Consulting Closed 12 Feb 2020 14 Feb 2020
Agribusiness Enterprise Development Specialist Individual - Consulting Closed 12 Feb 2020 14 Feb 2020

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan