ADB Approves $72 Million for Nepal
Durbar Marg, Kathmandu, Nepal, June, 18 2010 -
The Asian Development Bank (ADB) Friday approved $72 million, which includes $ 60.4 million loan and $12.1 million in grants, to Nepal for programmes aimed at providing access to poor and isolated rural communities to credit and financial services.
The cluster programme is targeting an increase in credit access to the rural poor from 1 million accounts in 2008 to 1.17 million by 2012 and an increase in women's access to finance from 200,000 accounts to 283,000 over the same period, ADB said.
ADB further said that the cluster program aims to remove obstacles to credit access in rural communities by carrying out institutional and policy changes designed to make rural financial institutions more willing and able to provide credit and services to those in need.
"The policy and institutional reforms under this phase of the program will transform key rural financial institutions into viable finance intermediaries with a strong client orientation and pro-poor focus, while improving the efficiency and outreach of semi-formal institutions," said Mayumi Ozaki, Finance Specialist, Rural and Microfinance, in ADB's South Asia Department.
ADB's loan which will help cover adjustment costs related to the restructuring of key rural finance institutions has a 24 year term, including a grace period of 8-years, with interest charged at 1 percent per year during the grace period and 1.5 percent for the balance of the term. The grant will help fund a sector project to develop a legal framework and regulatory authority to supervise and develop capacity at rural finance institutions. An additional grant of $200,000 from ADB's Technical Assistance Special Fund will provide capacity support to assist Agricultural Development Bank's transformation.
The Ministry of Finance is the executing agency for the programme, which run through June 2012.