DFID Nepal Access to Finance for the Poor Programme

2014-08-31 - 2014-11-30
Nepal

This program is designed to leverage access and facilitate financial sector development in Nepal, for (a) SMEs, and (b) poor people located in the western part of the country. The three key components of the program are: Improving access for SMEs by identifying key failures or inadequacies in the provision of financial services to small and medium enterprises (SMEs); Working towards creating a favourable regulatory, policy and institutional environment for equity investment for SMEs; and Increasing financial inclusion, including microfinance support to promote access to finance. This will include an analysis of the current demand and supply in the market, and an analysis of rural value chains. In the programme’s inception phase the LFS consultant did a value chain assessment to identify SME financial products to be rolled out to targeted communities through banks. Assessment also included the identification of various value chain partners that were to be integrated towards the development of new products and services, to be rolled out using bank partners. The project reference consists only of the Inception Phase; LFS did not take part in the Implementation Phase.
During the Inception Phase, activities included: Assessment of the SME lending market (including products, services and related innovation) in the priority geographical areas identified; Review of relevant activities and sub-outputs presented in the proposal for applicability based-off the above-mentioned assessment; Work with the Team Lead, Deputy Team Lead and other Component Leads to reach consensus on the priority districts for completing a value chain finance market research based off the underlying economies of the Western and Far Western regions; Value chain assessments to identify SME financial products to be rolled out to targeted communities through banks. Assessment included the identification of various value chain partners that will be integrated towards the development of new products and services, to be rolled out using bank partners; Determination of criteria for identifying and selecting 3-4 Banks to be part of a Performance-Based Partnering Program that will enable the development and rollout of new financial products/services and delivery channels (that also links agents and other financial institutions) to SMEs in underserved market segments based-off the above-mentioned value chain assessments; Working closely with other team partners responsible for mobile payment(s) systems and solutions, particularly in support of alternative delivery channels to targeted communities. Provision of input to the assessment feasibility and initial business planning of a proposed loan guarantee facility; Conducting woman SME banking diagnostic; Working with the Challenge Fund manager to identify opportunities for challenge fund co-investments with partner banks and others in support of the proposed interventions.