(A partnership between UKaid Sakchyam and Machhapuchchhre Bank Limited)


Farmers & micro enterprises operating in Nepal, face a number of issues and one key barrier faced is ‘access to finance’. Despite having knowledge, information on how to move beyond subsistence farming, their efforts to do more gets restricted due to lack of access to financial services. Moreover, even when they have access to finance through local financial institutions (FIs), the amount of fund available, features of financial products etc. aren’t as per their need. The case was evident with Heifer International and its cooperatives. Despite its decades of efforts to improve the livelihoods of its farmers one key challenge Heifer International and its farmers consistently faced is the lack of fund. Lack of fund means, despite the increased knowledge, capacity on account of Heifer’s interventions, these farmers, and micro-enterprises (all women) couldn’t scale up their operation.


Lack of required fund, was the key constraint faced by the farmers and cooperatives being promoted by Heifer International. Though Heifer’s support enabled farmers of the cooperatives to gain practical and theoretical know-how to upgrade their existing ‘subsistence focused’ livelihood activities into ‘semi-commercial’ or ‘commercial’ level, their cooperatives didn’t have required financial strength to provide required funds. Although, some of the cooperatives did manage to get ‘wholesale loans’ from some of the larger FIs including few commercial banks, which they would on-lend to their members, the availability of such funds remained sporadic and insufficient. Although direct access to bank loans seemed straightforward and sustainable solution to these issues, absence of banks’ presence in local areas, ‘insufficient collateral’ of the borrowers, and lack of interest on relatively smaller ticket size loans were known deterrents for the involvement of most of the commercial banks.

Sakchyam’s Intervention

To address the above-mentioned issues, UKaid Sakchyam Access to Finance Programme (Sakchyam) conceptualized a model of lending involving the bank, the cooperatives and Heifer International. Under the model, Heifer International would identify ‘viable cooperatives’, the cooperatives will screen out and recommend appropriate and interested farmers to the bank and the bank will provide loans to such recommended farmers without any additional collateral requirement. The model was ‘pilot’ tested in Dang district involving four cooperatives and their member farmers in late 2017. After enthusiastic uptake of the service with 100% repayment record, Sakchyam encouraged the bank and Heifer International to replicate the model across the country to benefit thousands of farmers.

Likely Impact

Under this new partnership (a scale-up exercise of that pilot in Dang), the bank aims to reach out to more than 4,000 loan beneficiaries and disburse loan in excess of NPR 499 million. Moreover, bank will also design a new loan scheme ‘Kisan Credit Card’, an innovative concept in Nepal, to meet the ‘working capital’ need of such micro-enterprise. Beyond mentioned numbers and innovations, the model will serve as a proof of concept on how the linkage between different FIs can be formed and channelized to benefit rural markets.

As of September 2019, Machhapuchchhre Bank has,

  • Disbursed loans to 633 customers,out of which 614 are women
  • Loan disbursed to the women beneficiaries are above NPR 163 million.
  • Collected deposit amount of NPR 508,925