September 17, 2015

District Overview

Kailali is one of the five districts within Seti Zone and lies in Province 7 of Nepal. Dhangadi is the district headquarters. The district, with an area of 3,235 sq.km, is divided into 43 VDCs and 2 Municipalities. It has 142,413 households with a total population of 775,709 (Male 378,417 & Female 397,292). Literacy Rate in the district is 66% (women’s literacy rate is 57%).[1]

The district is well served by road network. Kailali is the gateway to various hilly districts of the region such as Dadeldhura, Baitadi, Accham, etc. Due to its strategic location, the district can be considered as regional hub.

Economic & Financial Landscape

Agriculture (including livestock and poultry), food processing industries, service industries such as transportation, hotels and trading are the main economic activities of the district. Paddy, wheat, vegetables, fruits and potatoes are the main agricultural products of the district. As Kailali district and the surrounding areas are considered rice basket of the region, the district has many large and well known food processing industries in the area. Its rich forestry resources, around 64% of the area is covered by forest, also provides potential for herb collection and processing.

The district is served by 81 different branches of ‘A’ Class Commercial Banks, 24 different branches of ‘B’ Class Development Banks and 2 different branches of ‘C’ Class Finance Companies. The population served per branch is 8,326 against the national average of 8,960[2]. This indicates the need to further expand the outreach of financial services and facilities to the unbanked population of the area.

Agriculture is one of the top activities as stated by households. If we analyse the use of credit products in Agriculture, only around 22% had agriculture credit out of which major sources of credit were relatives (33%), followed by women’s group (23%) and farmer’s groups (4%).[3] Despite the presence of large number of FIs in the district, informal sector still are the dominant suppliers of the credit. This may be one of the limiting factors for the large scale commercialisation of agriculture sector. AFP Programme will work closely with FIs to increase the range of suitable financial products as well as to streamline process which will facilitate use of agriculture credit.

GESI Issues

Women suffer from gender based discrimination in education, nutrition, social and cultural norms. Women are less likely to be involved in economic activities outside the home and are marginalised in major decision making. Caste based discrimination is still prevalent in district. The district also has a number of vulnerable groups such as Tharu, Raji and Badi.

A key aim of the AFP programme is to improve access to financial services and encourage formal participation in the economic sector for women and deprived segment of the districts. The AFP programme will use the GESI lens throughout the project cycle for addressing these issues.

Sakchyam’s Ongoing Interventions

Value Chain Financing Innovations

  • A new loan product – Sajilo Khetipati Karja/Input Financing – targeting farmers has been launched in partnership with Bank of Kathmandu (BOK).
  • Laxmi Bank has also launched Tractor Loan targeting farmers in Kailali. They have also introduced Sakchyam Udhyami Karja, Micro Mortgage, E-Rickshaw and Livestock Loan.
  • Kanchan Development Bank launched Warehouse Receipt Financing targeting farmers in the district.
  • Wholesale Loan to Dairy Cooperatives, in the Dairy Value Chain has also been launched in partnership with NMB Bank.

Delivery Channel Innovations

  • The programme has been able to reach the unbanked population of the district through the launch of BLB Touch Points in partnerships with Janata Bank (ten BLBs), Global IME Bank (two BLBs), Mega Bank (three BLBs), Bank of Kathmandu (one BLB) and Everest Bank (two BLBs) in the district.
  • So far, UNYC, Janautthan Laghubitta Bittiya Sanstha, NUBL, KMF and Kisan Cooperative have introduced the use of tablets in the district.
  • Chhimek has distributed fifty one tablets in the district.

Outreach Expansion

  • New branches of FIs have opened to increase financial access for rural poor via partnerships with BOK (one branch), Citizens Bank (one branch), United Youth Community Nepal (UNYC) (ten branches), KMF (five branches), Kisan Cooperative (six branches) and Chhimek Bikash Bank (one branch).

Financial Literacy Initiatives

  • Various programmes on Financial Literacy are being introduced through conventional channels as well as alternate delivery channels such as Tablets and mobile phones. These programmes have been launched in partnership with NUBL, Kisan Cooperative, KMF, UNYC, Chhimek and RMDC.
  • NUBL is conducting tablet-based financial literacy campaigns in the district
  • UNYC and Kisan Cooperative are conducting financial literacy campaigns through PGT, IVR, Centre Meeting Modules, and FM Radio.
  • KMF has provided Financial Literacy Training to 402 school students in Kailali using videos.
  • Chhimek Laghubitta Bittiya Sanstha Ltd is conducting financial literacy campaigns through PGT, Centre Meeting Modules and videos.
  • Janautthan has been using flip chart, videos and financial literacy manuals for carrying out different financial Literacy activities.

Product Development

  • Business Loan Product and Ujyalo Loan Product have been designed and implemented in the district in partnership with UNYC. The Business Loan Product has now been replicated and launched in 29 other branches of UNYC and the Ujyalo Loan Product has now been scaled up and launched in ten other branches of UNYC. Similarly, UNYC has designed and launched ‘Plan Savings’ in Kailali.
  • Kisan Sakchyam Business Loan has also been designed and implemented in the district in partnership with Kisan Cooperative. This product has been replicated in eleven other branches of Kisan Cooperative.

Other Support

  • The programme is supporting Laxmi Bank, Machhapuchhre Bank and Sanima Bank to deploy Dedicated Assistant Relationship Managers (ARMs) to increase financial services to the rural poor.
[1] National Population Census (2011) [2] Nepal Rastra Bank (July 2018) [3] National Sample Census of Agriculture 2011-2012

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