NEPAL:

RURAL FINANCE SECTOR DEVELOPMENT

CLUSTER PROGRAM

BY
Nara Hari Dhakal
Project Coordinator/Rural Finance Sector Specialist
Ministry of Finance

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank
(ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty
or independent status or necessarily conform to ADB's terminology.
PROGRAM OVERVIEW
OVERVIEW OF IMPLEMENTING AGENCIES
Outcome, Output and Activities
RFSDCP II: GENDER ACTION PLAN
POLICY AND LEGAL FRAMEWORK
FOR RFIs OPERATION
 NEW MICROFINANCE POLICY 2008:
GENDER AND SOCIAL INCLUSION PERSPECTIVE

• Diversity of service providers

• Gender sensitive and inclusive focus
• Focus to extend financial services in remote
areas – special provisions
• Emphasis to promote access to financial
services mainly to women’s groups
• Generation of the dis-aggregated database.
• Creation of Second tier organization for
efficient regulation and supervision -
(financial, social and environmental
dimension)
 KEY GENDER INTERVENTIONS IN ADBL

• Addition of one female member in the

board of directors,
• Start-up of the women (only)
managed ADBL branch offices,
• Design of deposit product suitable for
women (Grihini Bachat), etc.
• Green card scheme for discipline
clients.
GENDER ANALYSIS OF ACHIEVEMENT IN ADBL
 KEY GENDER INTERVENTIONS: SFDB
• Inclusion of one women board of directors,
• Support to replicate women only SFCL under
replication program
• Promotion of women only groups during
outreach expansion by SFCL,
• Skill training support to women members,
• Diversification of savings and loan products
suitable to women
– Regular, voluntary and festival savings products
– General, seasonal, livestock and small
enterprise loan products
– Community managed insurance product
GENDER ANALYSIS OF ACHIEVEMENTS
IN SFDB
 GENDER ANALYSIS OF
ACHIEVEMENTS IN SFDB
 KEY GENDER INTERVENTIONS: GBBs
• Governance reform – divestment of NRB share to
public,
• Extend financial services for women only
• Support design savings, loan and insurance
products best suitable to women
– Voluntary and festival savings products
– General, seasonal, livestock and small enterprise loan
products (Loan size: Rs. 10,000 – Rs. 150,000
{$150-$2000} and interest rate: 18-20% declining
balance)
– Community managed insurance product, death relief
scheme, etc.
• Appointment of CEO from open competition
• Support to prepare and implement business plan,
 GENDER ANALYSIS OF
ACHIEVEMENTS IN GBBs
 GENDER ANALYSIS OF
ACHIEVEMENTS IN GBBs
 MAIN ACHIEVEMENTS
• RFSDCP has supported gender oriented MFIs (SFCLs
and GBBs) to extend credit to women.
• Promotion of gender and social inclusion-oriented
microfinance policies during the review and update of
the Micro Finance Policy, 2008 will support to enhance
access to finance to women and disadvantaged groups
• ADBL has continued to enhance access to finance to
women who require larger amount of loans after
completed loan cycles with MFIs.
• Increased emphasis to support formation and growth
of women SFCLs by SFDB has expedited access to
finance to women.
• Policy to target women by GBBs has been instrumental
to enhance access to finance to women.
 KEY CHALLENGES: GENDER BALANCE
IN ACCESS TO FINANCE
• Develop gender and social inclusion sensitive access
to finance policy,
• Increase credit outreach by ADBL to women and
graduated clients of MFIs,
• Increase credit outreach by SFDB to women,
• Develop a policy on inclusive financial services for
disadvantaged and marginalized groups
• Sensitize RFIs’ staff on inclusive finance (affirmative
measures)
• Enhance financial services to poor and dis-
advantaged groups in remote areas
 WAY FORWARD ON ENSURING GENDER
BALANCE UNDER RURAL FINANCE SECTOR
DEVELOPMENT CLUSTER PROGRAM II
• A microfinance policy addressing gender and social
inclusion aspects to be approved by the Government by
end 2011
• Credit outreach by ADBL to increase from 200,000
accounts in 2006 to 250,000, of which 20% are women,
by 2012
• A policy on inclusive finance services developed and staff
given training by end 2010
• Credit outreach by SFDB to increase from 140,000
accounts in 2008 to 240,000, of which 60% are women,
by end 2012.
• Access to finance in hills and mountain areas to increase
from 10,000 accounts to 30,000, of which 60% are
women.