Kanchan Development Bank Ltd.

Kanchan Development Bank Limited – Raising incomes of seed producing farmers of Kanchanpur, Kailali & Dadeldhura districts through increased financial access and value chain development



The seed replacement rate (SRR) of cereal crops in Nepal is below 15% and formal seed sector only contributes to about 20% of national seed demand.[1]  The status of far western region is not better and farmers either depend on poor quality seeds from across the border or use their own cereal stock as seed. Their problem is further exacerbated by the lack of sufficient fund to invest and absence of reliable value chain actors.

Kanchan Development Bank, a ‘B’ category financial institution with its head office at Bhimdatta-4, Kanchanpur has forged a partnership with Api Himalaya Agro & Livestock Company (Api Himalaya), a seed processing/marketing anchor firm to overcome the challenge. The partnership aims to enhance financial access to seed farmers of Kailali, Kanchanpur & Dadeldhura through tailored financial products, better technical skills and know-how to the farmers that will also strengthen seed value chain.


Challenges Faced

Use of quality seeds of improved varieties is necessary to increase crop productivity and income of small farmers. It is estimated that about 50% of the global increase in yields over the past 50 years has been derived from improved variety (genetic progress) and seed quality, in addition to agronomic improvement and phytosanitary product uses.[2]

Lack of quality inputs including seed is a major challenge for the farmers in Nepal and the plight of farmers in Kailali, Kanchanpur and Dadeldhura district is no different. The major factor for poor seed replacement rate is unavailability of quality seed in market. There is also absence of reliable seed value chain requiring farmers to spend inordinate long time and efforts on activities other than production. Further, there is lack of financial products tailor made to suit the needs of seed farmers. Very few financial institutions offer financial products, especially loan products, for farmers in general. These farmers have to depend on local money lenders, who charge exorbitant interest rate, for their financial needs. The major problems faced by the seed producing farmers are;

  • lack of sufficient investment for input supply
  • Lack of strong and reliable value chain actors

Sakchyam’s Intervention

Sakchyam’s support will enable Kanchan Development Bank offer tailor made financial products for seed farmers associated with Api Himalaya in Kailali, Kanchanpur and Dadeldhura districts. The support will also enable Api Himalaya to provide a range of value added services including capacity building for the farmers that will ultimately strengthen the seed value chain.


Likely Impact

[1] http://www.moad.gov.np/downloadfile/combibed_1374486353_1423039234.pdf

[2] http://www.fao.org/docrep/006/Y4011E/y4011e0v.htm

Kanchan Development bank will provide loans and other financial services to 10,000 plus seed producing farmers of Kailali, Kanchanpur & Dadeldhura. During the project period, loans of NPR 270 million will be disbursed to these farmers.  Financial access and other value added services that the farmers will receive through Api Himalaya is also expected to enhance farmers’ income by more than 40%.


Latest Update on Sakchyam-Kanchan Development Bank Partnership

As of September 2017, Kanchan Development Bank have,

  • 1,514 beneficiaries added as against the target of 1,676. The bank has disbursed loans totaling NPR 5.8m (roughly 10% of target for the period)
  • Collected the deposit amount of NPR 5.4 million
  • Two VCF products designed with Sakchyam support in operation.