UNNATI - Access to Finance (A2F), a project jointly implemented by Nepal Rastra Bank and the United Nations Capital Development Fund (UNCDF) and funded by the Danish Government under UNNATI Inclusive Growth programme held a ceremony to celebrate the signing of Technical Assistance partnership agreement with 13 banks and financial Institutions.

The occasion was marked with the chief guest honorable Deputy Governor, Mr. Maha Prasad Adhikari of the Nepal Rastra Bank in a presence of Mr. Jan Møller Hansen, Chargé d’Affaires, Embassy of Denmark, Nepal, board members of UNNATI – A2F , other senior level officials from the NRB, chief executive officers of banks and financial institutions and representatives from UNCDF.

UNNATI-A2F project works in the Eastern Development Region, specifically in Ilam, Panchthar, Terhathum, Bhojpur, Dhankuta, Taplejung and Sankhuwasabha districts. The objective of the project is to support the financial institutions in Nepal to more effectively serve the agriculture value chain actors with appropriate financial products to create and enabling environment for smallholder farmers and MSMEs to invest in their value chain activities leading to increased income and better livelihoods.

The project's target groups are smallholder farmers and micro, small and medium enterprises (MSMEs) focusing on women and vulnerable groups in the rural areas. The project will work with financial institutions through two distinct windows: 1) Technical Assistance, under which 13 banks and financial institutions signing the TA agreement today were selected by the project among 32 banks and financial institutions expressing their interest to work in partnership and 2) Expanding Financial Frontiers Challenge Fund, which will be open in the near future to all financial institutions including those licensed and supervised by NRB, financial cooperatives and insurance companies.

Under the TA agreement, UNNATI-A2F will provide technical support to its partner institutions in some specific areas including: assessment of Management Information System and upgrading of the system; training and capacity building for market research and product development for the agriculture sector; training and exposure visit on Agriculture Value Chain Financing; feasibility study for expansion of branches and branchless access points in remote areas; financial literacy for building capabilities of clients and potential clients, etc.

As a result of the technical support, partner financial institutions are expected to increase the range of their financial products and expand their financial services in rural remote areas targeting agriculture value chain actors working especially in the orthodox tea, large cardamom, ginger and dairy value chains. Smallholder farmers and agriculture based MSMEs who were hitherto un-served or underserved by formal financial service providers will have access to appropriate and affordable financial products are services. The partnership with these banks and financial institutions is for 4 years from now onward to September, 2018. Within the project period, the project has envisaged to reach significant number of households providing support under TA agreement.

Dr. Binod Atreya, Executive Director of Nepal Rastra Bank - Microfinance Promotion and Supervision Department and the National Project Director of UNNATI-A2F welcomed the delegates and looked forward to a fruitful partnership with the banks and financial institutions resulting in the increase of agriculture finance in the country in general and agriculture value chain financing in the Eastern Development Region in particular. He explained that following the commencement of Technical Assistance Agreement, UNNATI-A2F project together with the partnering financial institutions will be able to address the key bottlenecks and constraining factors that hinder the smooth flow of agriculture finance in rural areas, especially to smallholder farmers MSMEs. He explained that the project has goal to reach more than 250 thousand households during the project. He further added that the project has been successful in setting a milestone with this signing agreement. Now the project has entered to the main phase directed towards achieving expected results. Dr. Atreya noted that similar opportunities to participate with the project will also be offered to other banks and financial institution in the next year.

Following the welcome remarks, Mr. Ujjwal Raj Pokhrel, National Programme Coordinator, UNCDF Nepal made a brief presentation on how UNNATI-A2F through the TA agreement will facilitate partner financial institutions to provide technical assistance to improve their capacity and existing systems and procedures and what are the specific support that the project will provide to the partner institutions and how such support will result into financial inclusion resulting into expansion of their client base and profit.

After questions and answer session following the presentation, TA agreements were signed with the following financial institutions:

• Century Commercial Bank Limited
• Chhimek Laghubitta Bikas Bank Limited
• Everest Bank Limited
• Forward Microfinance Bittiya Sanstha Limited
• Janata Bank Nepal Limited (JBNL)
• Jeevan Bikas Samaj (JBS)
• Laxmi Laghubitta Bittiya Sanstha Limited (LxLB)
• Nerude Laghubitta Bikas Bank Ltd (Nerude)
• NirdhanUtthan Bikas Bank Limited (NUBL)
• NMB Bank Limited (NMB)
• Sana Kishan Bikas Bank Ltd.(SKBB)
• Society of Local Volunteers' Effort (Solve Nepal)
• Swabalamban Laghubitta Bikas Bank Limited (SWBBL)

In his key remarks, Mr. Jan Møller Hansen, Chargé d’Affaires, Embassy of Denmark emphasized the importance of access to finance and financial inclusion for inclusive growth and development of rural economy for improving the living standards for the people of Nepal. He also stated that the role of financial service providers is very crucial in UNNATI for serving more value chain actors with appropriate financial products, thereby enabling smallholder farmers and Micro, Small and Medium Enterprises to invest more into their value chain activities.

Mr. Maha Prasad Adhikari, Deputy Governor of NRB in his key-note speech highlighted the importance placed by NRB on financial inclusion. He noted that the monetary policies and the directives of the central bank have always been in favor of increasing rural and agricultural finance. Mr. Adhikari added that strong coordination mechanism between banking, insurance and non-bank financial intuitions along with private sector player is to be required to achieve universal financial access goals.

Mr. Adhikari reaffirmed the need for inclusive growth policy for Nepal, for which NRB in coordination with the government of Nepal, has already taken a number of policy measures to ensure reliable and affordable financial services to the poor people in the country. Mr. Adhikari reiterated that the access to finance is a means for successful poverty reduction strategy and the use of innovations such as mobile banking and other commercially viable pro poor products will be future options. He highlighted the current embargo situation and urged the banks and financial institutions to take this as an opportunity and review their lending system that would help the country to become sustainable in generating products and services.

In the closing remarks Mr. Mr. Upendra Poudel, President, Nepal Bankers Association and Board Member, Project Executive Board, UNNATI – A2F, highlighted that UNNATI-A2F project is especially focus on the promotion of agriculture sector through improving the mechanism of value chain financing. Access to Finance (A2F) will have greater impact not only to the targeted beneficiaries but also assist banks and financial institutions in innovating agricultural value chain finance products and hence boost up client based and profit of the banks and financial institutions. He also added that the partnership will also lead the banks and financial institutions in the appropriate use of technology that can help upscale deepen financial services to unreached areas of Nepal through the use of mobile money and digital financial services.

The signing ceremony included a substantial gathering of senior officials from the Embassy of Denmark, Government of Nepal, Nepal Rastra Bank, Financial Institutions, Remittance and Insurance companies, private sector entities, academics, donors and development partners and representatives from various media houses.

The objective of the ceremony was to formally launch the partnership agreement between UNNATI-A2F and the financial institutions so that field level activities in the area of financial inclusion and agriculture finance can begin without delay.

For more information please contact

Dr. Binod Atreya, (binodatreya@nrb.org.np) +977 98510 56122

Mr. Ujjwal Raj Pokhrel (ujjwal.pokhrel@uncdf.org) + 977 984 346 0017