(A partnership between UKaid Sakchyam and Sanima Bank Ltd)


The agriculture sector is one of the major contributors to Nepal’s GDP, 27.6%, in the fiscal year 2017/18. By the end of the FY 2017/18, the Financial Service Providers (FSPs) had disbursed loans worth of NPR 135.78b (about 5.6% of the total loan portfolio of FSPs) to this sector.


Agri-financing, considered as one of the riskiest sectors for lending by FSPs, is facing a wide range of issues including lack of dedicated and focused approach, a suitable range of financial services, appropriate lending methodology and sector-specific risk management practices.

As per the priority section lending requirement, Nepal Rastra Bank has set a mandatory target to the commercial banks to provide 10% of the total loan portfolio to the agriculture sector. Despite improved footprints of banks in remote and rural locations, many commercial banks are still struggling to meet the target on agriculture lending.

The challenges faced by commercial banks lie in lack of technical know-how of agricultural sector, absence of financial products that are aligned to Agri-sector and its specific characteristics, and lack of a focused strategy that identifies agriculture sector as one of the key areas. The banks also need to ensure appropriate risk management and lending methodology, and usage of technological solutions for effective and efficient decision makings.

Sakchyam Intervention

UKaid Sakchyam Access to Finance programme has identified the need for a more structured approach in building loan portfolio focused towards the agro-businesses. This has led to the partnership between Sakchyam and Sanima Bank to meet the financing gap in the agriculture sector for small scale farmers, agro farm, agro entrepreneurs, women entrepreneurs and deprived sector.

The partnership aims to provide inclusive access to finance to individuals such as smallholder farmers as well as enterprises involved in agri-business activities. Under the partnership, the bank will structure the loan products and streamline the lending model to cater all the entities involved in the agriculture value chain.

The bank will take up the following steps to achieve the objective of the project:

— conduct focused research, seek consultation services

— adopt technology-supported risk management practices for efficient and objective decision making

— design specific products targeting the sector and revisit its existing products to ensure better coverage for the agro firms/businesses

— develop a robust system to cater to the loan requirement of the agriculture sector through dedicated resources, expertise and system at the central level and branches of the bank.


Within the project period, the bank aims to disburse around NPR 1.9 billion in agriculture loan and improve income and livelihood of 1,708 loan beneficiaries.


As of March 2021, Sanima Bank has:

  • Established a dedicated Agri Lending Unit
  • Developed a product – Commercial Agriculture Loan (CAL) targeting the Agri SMEs
  • Reached more than 840 customers
  • Disbursed loan above NPR 2.2 Billion