Summary Strategies for Expanding Microfinance Services in Hills and Mountains

This project, implemented by the Small Farmers’ Development Bank (SFDB), Nepal, sets out strategies to expand microfinance services in the hills and mountain areas of the country.

There is an acute shortage of financial services in rural Nepal. Access to finance is especially limited in the hills and mountains. The SFDB was established in 1987 to provide wholesale lending to Small Farmers Cooperative Limited (SFCLs). SFDB currently has 219 partner SFCLs, of which 50 operate in the hills and mountains.

SFDB wants to expand financial service outreach in the hills and mountains by further strengthening its partner SFCLs as well as extending support to other microfinance NGOs and self-help groups in those areas. It intends taking up the following activities to fulfil this goal:

• Select districts from the hills and mountains for the first phase of the program;
• Map cooperatives and NGOs operating in these districts;
• Conduct institutional assessment and rating of MFIs, and identify training and technical assistance needs;
• Design training and technical assistance tools, and help in MFI capacity building;
• Extend wholesale credit;
• Plan and implement MFI development, monitoring, and reporting.