UNCDF in Nepal

UNCDF in Nepal

The Challenge

Apart from having the lowest GDP per capita of 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 2013 Human Development Report, Nepal was ranked 157 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 programme provides an opportunity for the Government to take the lead in coordinating once-fractured donor support, promoting inclusive, responsive and accountable local governance in which citizens are actively engaged. LGCDP is financed primarily by the Government of Nepal and supplemented by a number of development partners under various financing arrangements. The second phase of the programme has rolled out, to which UNCDF will be supporting through a UN joint programme with UNDP and UNV.

Within LGCDP, UNCDF interventions include supporting a Human Development Social Protection Pilot reaching 26,000 beneficiaries; supporting the Local Body Fiscal Commission on Minimum Conditions and Performance Measures; supporting various Public Financial Management areas and environment areas such as investing in local level climate resilience.

UNCDF has also been addressing the challenge of equitable growth in Nepal through the Enhancing Access to Financial Services (EAFS) project 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’s Inclusive Finance Practice Area (FIPA) portfolio in Nepal is expanding to areas of branchless and mobile banking services for the poor, clean energy finance, microfinance and policy development. 

Energy is at the heart of major development challenges and opportunities that Nepal faces today. UNCDF, through its global programme CleanStart, plans to invest US$1.3 million over a period of four years (2012-2015) to develop replicable business models for scaling up microfinance for cleaner and more efficient forms of energy for poor people. By end of programme, more than 150,000 low-income households and micro-entrepreneurs will have access to modern energy. CleanStart will be anchored in the Alternative Energy Promotion Centre (AEPC) which is the lead national agency mandated to promote and develop renewable energy through policy formulation, quality assurance and financial assistance.  CleanStart will support the objectives of the National Rural & Renewable Energy Progamme (NRREP).

Moreover, UNCDF, Sida and AusAID have 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.

In Detail


Local Governance and Community Development Programme (LGCDP)

Goal To promote decentralization of governance, improved local service delivery and grassroots community empowerment.
  • 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.
Period Phase I: 2008-2013 Phase II: 2013-2017
Partners UNCDF, 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 contribution Phase I: USD 54,881,910 Phase II: USD 1,362 million
Phase I: USD 2,250,000 Phase II: USD 1,600,000


Goal To help poor households and micro-entrepreneurs to access financing for low-cost clean energy.
  • 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.

Period 2012 – 2017
Partners UNCDF, UNDP, Alternative Energy Promotion Centre (Nepal), Ministry of Energy and Mineral Development (Uganda).
Total project cost and UNCDF contribution USD 26,193,525
USD 1,000,000

Mobile Money for the Poor (MM4P)

Goal To 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.
  • 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;
Period 2011-2017
Partners UNCDF, Sida, AusAID
Total project cost and UNCDF contribution 27,000,000

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