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Easy access to finance at the grass root level Samriddha Pahad is an International NGO based in Nepal and authorized by the country’s Social Welfare Council An agreement was signed between NMB Bank and Samriddha Pahad to explore opportunities in increasing access to finance for rural small farmers, SMEs and other relevant business entities in Nepal. The project aims at increasing access to finance for backward communities of the eastern hilly regions (Ilam, Pachthar and Taplegunj) through interventions (called mountain finance). The purpose is to enhance financial access and simultaneously improve the livelihoods of people through income generation, employment and inclusiveness. The project was initiated at a time when the government, international communities and policymakers were strongly pushing the agenda of sustainable and inclusive development. The project has used a unique model by integrating various actors of the dairy value chain by ensuring easy access to finance at the grass root level. The lending model arrangement uses a distinct process which creates an effective collaboration among various linkages which exist in delivering the final product to the consumer. The cooperatives identified and recommended by Samriddha Pahad are provided wholesale credit facilities by the Bank after

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a satisfactory due diligence. The cooperatives, in turn, lend the amount to dairy farmers. The farmers use the credit facility to start as well as expand their dairy business. The milk thus produced is collected by the cooperatives and deposited in the Dairy Development Corporation (DDC) nearest collection center. The DDC processes the milk which is ultimately distributed to the final consumers.

producing milk, there exists a gap in the demand and supply of finance as well as technical capacity building assistance. The same model can be replicated in other potential areas Efforts should be made to include the government as a partner in such projects. The government through its interest subsidy programs and specialized knowledge acquired through its research agencies can boost the productivity of small dairy farmers.

The project has been a successful experience in value chain financing. Until now, 15 cooperatives have been availing credit services from NMB Bank under the project. There is no late repayments issue which has substantially reduced recovery and collection costs. The total loan amount limit is NPR 55,440,000 while the outstanding loan amount is NPR 24,811,094 until now. Currently, 3,263 farmers have availed credit facilities and technical assistance under this project. The number of new cattle purchases after the initiation of this project is 516 of which the 516 cattle are insured. The average milk collection per day from all cooperatives under this project is 7,360 liters. The total number of beneficiaries is 3,552 among which 2,210 are male and 1,342 are female.

The potential of more than 70% people involved in agriculture sector contributing one third in the GDP of Nepal can only be truly harnessed if the likes of such projects are implemented in every specialized pocket areas demarcated by the government. This model can be further enhanced by including suppliers and end buyers (such as dairy industries) in the value chain as partners to have a better outcome – the same is under discussion ---

While people in other development regions are doing commercial farming by procuring costly cattle with a larger capacity of


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