NMB Bank



In the mid- and far-western regions of Nepal, there are many milk cooperatives which collect milk from local farmers and supply it to the Dairy Development Corporation (DDC). Different actors in the value chain are milk farmers, milk cooperatives, dairy processor and wholesalers and retailers. There are opportunities for improvement in the current value chain that can contribute toward improving delivery channels and procedures and improve income, livelihoods and opportunities for the rural population.

Challenges Faced

Besides collecting milk from the farmers, the milk cooperatives also provide loans to the farmers (members) to support them in milk producing activities. However, resources (mainly fund) raised from local level is not adequate to meet the growing need of the farmers. Further, these cooperatives also lack institutional capacity to scale up their operation and provide service in an efficient and effective way to a larger community.

Sakchyam’s Intervention

With NMB Bank’s innovative Sakchyam Dairy Financing to Milk Cooperatives, Micro, Small and Medium Enterprises (MSMEs) and Farmers of Mid and Far-Western region in partnership with the Dairy Development Corporation (DDC) can receive required financial resources and supply milk to DDC which can open new avenues for all the players of the milk value chain. Building the capacity of Milk Cooperatives, farmers and MSME’s will be a key element toward creating opportunities for all stakeholders in the longer run. An SMS-based information sharing module has also been developed and designed in coordination with milk cooperatives and the DDC for query-based solutions to get instant alerts on milk quantity, quality and value of the deposited milk.

Likely Impact

With UKaid Sakchyam’s support, more than 5000 households, more than 50 Milk Cooperatives, and at least 400 MSMEs will enjoy much needed financial services from the bank. The bank will disburse NRs. 250 million in loans in the 3-year duration. Also, capacity strengthening of the stake holders – especially milk cooperatives, local farmers and MSMEs can create opportunities in the value chain. Engaging farmers in banking activities and enrolling them in the financial system can further assist in the inclusion of unbanked population of the area and develop new products for people in these rural communities. The successful rollout should encourage the replication of similar products in other districts as well.

Latest Update

As of March 2018, NMB Bank has reached 1500 beneficiaries, approved 13 Milk Cooperatives to carry out dairy financing services and disbursed loan of NPR 123.3 million.