NEPAL

Since 1984, UNCDF has been providing capital investments and technical assistance to the private and public sector in Nepal. UNCDF in Nepal offers “last mile” finance models to build inclusive digital economies and support local economic development.

Working with policymakers, ministries, subnational governments, financial service providers and development partners, UNCDF offers innovative financial solutions that help unlock public and private finance at the local level and accelerate the development of digital innovations.

Women’s economic empowerment

UNCDF’s work in Nepal helps catalyse finance, mobilize capital and de-risk investments for digital business models and solutions that alleviate the constraints faced by women-owned micro, small and medium enterprises (MSMEs).

UNCDF has supported the private sector to digitize women-led MSMEs and provide them with access to finance. This includes e-commerce platforms, digitally-enabled green innovations, digital and financial literacy tools, digital business support solutions and digital loan platforms.

UNCDF is deploying its financial instruments, such as performance-based grants, coupled with technical assistance, to help MSMEs digitize payments, delivery and post-sales services in rural areas, boosting their sales and helping them recover from the effects of the pandemic.

Additionally, UNCDF is supporting the government of Nepal in measuring its progress in building an inclusive digital economy through the National Financial Inclusion Strategy.

Local Transformative Finance

UNCDF works as a financial and technical partner for local transformation, combining finance and investment instruments with sector expertise in subnational public and private finance.

In partnership with the Town Development Fund (TDF), UNCDF prepares innovative solutions to expand financing for local governments and develop financing instruments that diversify and aggregate municipalities’ financial base, which includes Revenue Improvement Action Plans of the municipalities.

Local Climate Adaptive Living Facility

The Local Climate Adaptive Living Facility (LoCAL) was active in Nepal from 2014- 2018 and engaged with 22 local governments. This work demonstrated the role and ability of local governments to promote climate change resilience investments through mainstreaming climate finance into the intergovernmental fiscal transfer system and local planning and budgeting process.

Most of these investments focused on climate-related disaster prevention, with projects addressing bio-engineering, drainage and damming works on roads, river streams and canals to prevent flooding and landslides for downstream and neighbouring communities. Other interventions aimed at improving rainwater harvesting and availability through the construction or restoration of community ponds for irrigation and watering cattle. Some measures included alternative income-generating activities, such as eco-tourism in Siddalake and a beekeeping initiative in Gajuri. In the changed federal context of Nepal, UNCDF signed a grant agreement with the NDC Partnership to support the government of Nepal to engage, coordinate, facilitate and mobilize actors and resources for the Nationally Determined Contribution (NDC) implementation while plans are underway to re-introduce LoCAL in Nepal.

Sustainable Food Systems Finance

UNCDF assists Nepal on its journey in building a more inclusive and resilient economy that can manage external shocks by preparing smallholder farmers through expanded access to digital financial services and products.

UNCDF works to increase financial and digital literacy of smallholder farmers by:

• providing access to market through digital platforms,
• increasing access to finance through collateral-free agriculture loans,
• helping with the procurement of agricultural inputs,
• supporting pay-as-you-go irrigation solutions.

In partnership with the Insurance Regulatory Authority of Nepal, UNCDF showcases the benefits of climate-smart agriculture insurance, de-risking insurance products in response to climate threats to ultimately increase their uptake by the most vulnerable rural smallholder farmers.

Migration and remittances

UNCDF has supported a private sector innovation using blockchain technology to link remittances sent by Nepali migrants with digital savings and credit products to help migrants and their families generate more income.