(A partnership between UKaid Sakchyam and Kanchan Development Bank Limited)


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 of the country is not any 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.


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 seeds in market. There is also an absence of reliable seed value chain, resulting in farmers spending inordinate long time and effort 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. Thus, 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

With UKaid Sakchyam Access to Finance’s (Sakchyam’s) support, Kanchan Development Bank, a ‘B’ category financial institution with its head office at Bhimdatta-4, Kanchanpur forged a partnership with Api Himalaya Agro & Livestock Company (Api Himalaya), a seed processing/marketing anchor firm to overcome the challenge. The partnership aimed 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 would also strengthen the seed value chain. Sakchyam’s support would enable Kanchan Development Bank to offer tailor made financial products for seed farmers associated with Api Himalaya in the above mentioned three districts. The support also aimed at enabling Api Himalaya to provide a range of value added services including capacity building for the farmers that would ultimately strengthen the seed value chain.


During the project period, the aim was to disburse loans of NPR 270 million to the targeting farmers. Financial access and other value added services such as availability of high quality seeds, training and information on better farming practices and buy back facility that the farmers will receive through Api Himalaya is also expected to enhance farmers’ income by more than 40%.

As of June 2018, Kanchan Development Bank has reached more than 1,850 beneficiaries as against the target of 1,676. The bank has disbursed loans totaling NPR 27.74 million and collected the deposit amount of NPR 6.36 million. In addition to this, two value chain financing products were also designed with Sakchyam’s support. However the project had to close due to the unsatisfactory performance.

[1] http://www.moad.gov.np/downloadfile/combibed_1374486353_1423039234.pdf [2] http://www.fao.org/docrep/006/Y4011E/y4011e0v.htm