Improving Access to Finance Sector Development Program

The project aimed at improving the access to financial services for the poor and low-income population in Nepal, in particular in mountain and hill areas (program impact) and to develop a sound and market-oriented microfinance sector in Nepal.

The outcome of the project was a Program Preparatory Technical Assistance (PPTA) combined with a mapping and baseline survey, which lead to the design of the "Improving Access to Finance Sector Development Program" with the components: policy and institutional reform conditions, and other implementation arrangements satisfactory to the Government of Nepal, Rastra Bank and Asian Development Bank (ADB).

Services included:

  • Review of the Government´s Microfinance policy (2008) and recommendation for commercial oriented microfinance policies;
  • Report on impact, issues and constrains of the deprived sector lending scheme of the Government;
  • Report on legal and regulatory arrangement review and a business plan of the second tier institution (microfinance regulatory authority);
  • Review and recommendation on the existing legal and regulatory framework for microfinance including a Draft Microfinance Act;
  • Report on the review of the microfinance wholesale organisations and plan for commercialization of the MFI sector;
  • Report on the training need of MFIs and plan on establishing a training window or Institute for MFIs;
  • Microfinance training institute business plan;
  • Report on the current status MIS in microfinance and proposal on a fund mechanism for a matching grant scheme for MFI / MIS technology development,
  • Plan and approach to improve savings mobilizations by MFIs;
  • Report on a plan to expand microfinance outreach in hills and mountains;
  • Conduct detailed client survey and assess their needs and constrains in access to finance and develop poverty reduction strategies as well as gender action plan for inclusion;
  • Review of positive and negative impacts on environmental, indigenous people and gender aspects of the proposed program;
  • Carry out a microfinance and rural finance mapping survey in selected districts to know the status of access to finance and existing MFIs to form the baseline of the program;
  • Conduct economic and financial analysis and prepare the project cost estimates and financing plan;
  • Carry out governance risk assessment and financial management due diligence. Conduct peace filter analysis and peace building tools development;
  • Access the program implementation capacity of the executing and implementing agencies especially on procurement activities.