UNCDF in Nepal

UNCDF in Nepal

The Challenge

Apart from having the lowest GDP per capita in South Asia, the Federal Democratic Republic of Nepal has the lowest life expectancy, the largest share of undernourished children, and significant inequality across social groups. In the 2014 Human Development Report, Nepal was ranked 145 out of 187 countries.

How We Are Helping?

UNCDF is helping to address Nepal’s development challenges by working to strengthen local service delivery and expand access to financial services for the poor through the government’s national flagship programme on Local Governance and Community Development. The Local Governance and Community Development Programme (LGCDP) is the largest decentralization programme in Nepal and is a major initiative by the Government to bring quality basic services to all — particularly disadvantaged communities, while ensuring the accountable delivery of local services through established institutions and systems.

The second phase of the programme, LGCDP II, rolled out in July 2013. In this project, UNCDF is piloting the Human Development and Social Protection Pilot (HDSPP), which aims at strengthening the capacity and role of central and local government in delivering social protection cash transfers through branchless banking and, within this context, to strengthen linkages between the education sector and local government accountability to citizens.

Additionally, to address the climate change challenge in Nepal, UNCDF is piloting its “Local Climate Adaptive Living Facility” project. Known as LoCAL, it aims to increase climate change adaptation financing while strengthening the capacity of local governments and of the local climate change adaptation planning process through a system of performance-based grants.

In March 2013, UNCDF completed its Enhancing Access to Financial Services (EAFS) project, which tackles the challenge of equitable growth in Nepal through, in which it worked closely with a range of financial service providers to dramatically scale up their outreach.  Building on the success of the EAFS project, UNCDF has developed a successor project titled “Access to Finance (A2F)” under the UNNATI Programme, which supports financial service providers to more effectively serve the agricultural value chain actors with appropriate financial products enabling smallholder farmers and Micro Small Medium Enterprises (MSMEs) to improve their competitiveness.

UNCDF’s Making Access to Finance Possible (MAP) project aims at defining the financial inclusion agenda in Nepal and aligning resources with key priorities based on a rigorous evidence-based diagnostic exercise, with the support received from DFID Nepal.

Moreover, UNCDF, with the support of Sida and AusAID has developed the Mobile Money for the Poor Programme (MM4P) to support branchless and mobile financial services in Nepal to demonstrate how the correct mix of financial, technical and policy support can assist in scaling up sustainable branchless and mobile financial services that reach the poor in very low-income countries.

When it comes to sustainability, energy is at the heart of major development challenges and opportunities that Nepal faces today. UNCDF, through its global programme, CleanStart, aims to invest US$1.3 million over a period of five years (2012-2016) to develop replicable business models for scaling up microfinance for cleaner and more efficient forms of energy for poor people. Through the CleanStart project, more than 150,000 low-income households and micro-entrepreneurs in Nepal will have access to modern energy. The CleanStart project is anchored in the Alternative Energy Promotion Centre, which is the lead national agency mandated to promote and develop renewable energy through policy formulation, quality assurance and financial assistance. 

In Detail

Project

Local Governance and Community Development Programme (LGCDP)

GoalTo promote decentralization of governance, improved local service delivery and grassroots community empowerment.
How
  • Promoting more active and effective interaction by marginalized citizens with their local governments; 
  • Building the capacities and procedures of local bodies and their financing arrangements; 
  • Providing capacity building and institutional support at the central level and policy advice.
PeriodPhase I: 2008-2013 Phase II: 2013-2017
PartnersUNCDF, UNDP, Government, UK Department for International Development (DFID), Canadian International Development Agency (CIDA), Swiss Agency for Development and Cooperation (SDC), Danish International Development Agency (DANIDA), GTZ, NORAD, ADB
Total project cost and UNCDF contributionPhase I: USD 54,881,910 Phase II: USD 1,362 million
Phase I: USD 2,250,000 Phase II: USD 1,600,000
Progress
Budget
Results (including scaling and policy impact)
Project

CleanStart

GoalTo help poor households and micro-entrepreneurs to access financing for low-cost clean energy.
How
  • Strengthening capabilities of financial service providers to provide microfinance for clean energy;

  • Removing barriers to the successful deployment of those technologies and services;

  • Enhancing awareness globally of the potential for microfinance to scale-up access to clean energy;

  • Creating an enabling policy and business environment to expand microfinance for clean energy.

Period2012 – 2015
PartnersUNCDF, UNDP, Alternative Energy Promotion Centre (Nepal), Jevaan Bikas Samaj (JBS), Sana Kisan Bikas Bank Ltd. (SKBB), Ace Development Bank (ACE) , Clean Energy Development Bank (CEDB)
Total project cost and UNCDF contributionUSD 1,300,000
-
Progress
Budget
Results (including scaling and policy impact)
Project

Mobile Money for the Poor (MM4P)

GoalTo demonstrate how the correct mix of technical, financial, and policy support can assist in scaling up sustainable branchless and mobile financial services that reach the poor in very low-income countries.
How
  • Providing financial and technical support to service providers and financial service agents;
  • Supporting market and client research to develop products and services that reach low-income and rural households;
  • Bringing large scale users into the branchless and mobile financial services system;
  • Assisting central banks to create enabling environment for branchless and mobile financial services;
Period2014-2019
PartnersThe MasterCard Foundation, Bill & Melinda Gates Foundation, Sida, Australian Department of Foreign Affairs and Trade (DFAT)
Total project cost and UNCDF contribution$36,083,598.88
$1,918,415
Progress
Budget
Results (including scaling and policy impact)
Project

Support to Financial Inclusion in Nepal Through The “Access To Finance (A2F)”

GoalTo support financial service providers to more effectively support the agricultural value chain actors with appropriate financial products there enabling smallholder farmers and MSMEs to invest into their value chain activities leading to the sustained im
How
  • Deepen financial services for smallholder farmers and MSMEs
  • Improve capacity of financial institutions
  • Broaden financial services for smallholder farmers and MSMEs
Period2014-2018
PartnersNepal Rasta Bank, Government of Nepal
Total project cost and UNCDF contribution$9,472,339
$1,022,875
Progress
Budget
Results (including scaling and policy impact)
Project

Local Climate Adaptive Living Facility (LoCAL)

Goalto promote climate change resilient communities and economies by increasing financing for and investment in climate change adaptation at the local level in least developed countries (LDCs).
How

LoCAL operates through performance-based climate resilient grants that ensure programming and verification of climate change expenditure (PBCRG) at the local level. It uses the demonstration of its effect to trigger further flows for local adaptation, including national fiscal transfers and access to global climate finance for local governments (through their national governments) and for private sector and public/private adaptation initiatives.

Period2014-2018
PartnersEU-GCCA; SIDA; Liechtenstein; UNDP GEF and Government of Benin
Total project cost and UNCDF contribution$40 Million
$800 thousand
Progress
Budget
Results (including scaling and policy impact)

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