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Nepal: Loans for small farmers

The Small Farmer Development Programme (SFDP), implemented by the Government of Nepal, gives loans of up to NRs30,000 (currently $1 = 56.8 Nepalese rupees) on a group-collateral basis to small groups of farmers for various income-raising, agro-based enterprises. By 1992, the programme had formed 19,307 credit groups for men and 4,837 for women, each with 5 to 10 members. The groups covered 123,000 families whose annual per capita income was below Nrs2,500.

UNICEF has supported SFDP in some areas since 1982-1983 with interventions in health, nutrition, education and water and sanitation. The repayment rate for the loans is above 80 per cent in the women's groups and 60 per cent in the men's. The loan repayment rates are higher in those areas where social interventions are combined with credit than in areas where credit alone is given. Social indicators also show greater improvement in areas where credit is combined with delivery of basic social services:

school attendance of girls between 5 and 14 years of age was higher in families that received both credit and support for basic social services than it was in families that received credit alone and in families in areas where there was no SFDP (75 per cent, 63 per cent and 50 per cent respectively);
infant mortality rates were lower in areas with a combined credit and basic social services approach than in areas where credit was extended without social services and in those where no credit was provided (113, 116 and 135 per 1,000 live births respectively);
the average number of child deaths from diarrhoea was reduced by 33 per cent in the areas where credit alone was provided and by 37 per cent where credit was combined with basic social service interventions; immunization coverage for BCG (tuberculosis), DPT3 (diphtheria, pertussis, tetanus), polio and measles was higher in areas of combined credit and social development interventions than in areas where credit alone was extended or where no programme was operating at all (83 per cent, 71 per cent and 61 per cent respectively);
more women of reproductive age were immunized against tetanus and had greater knowledge of nutritional needs in areas where credit and basic social services were combined;
the proportion of households with latrines was twice as high in areas where credit and basic social services were linked, compared with the areas where SFDP was not operating. In areas where UNICEF gave support, 70 per cent of households built latrines after receiving SFDP credit compared with only 45 per cent where only SFDP provided assistance;
the percentage of households using tap water doubled (from 19 per cent to 38 per cent of households) in areas where SFDP extended only credit, but it rose by a factor of four when credit was linked with basic social services (from 9 per cent to 36 per cent).

Source: Evaluation Study of the Small Farmer Development Programme, UNICEF Nepal, 1995.

Nepal: Production Credit for Rural Women

"We women do not own anything and PCRW offers us credit with out our having to use property as collateral." -- woman borrower

"Our entire family has benefited from the project... my daughter has attended literacy classes, my children have all been inoculated." -- husband of PCRW member

The Production Credit for Rural Women (PCRW) programme began with UNICEF support in 1982 in five districts of Nepal and now operates in 24. In 1989, a basic social services component was added, along the lines of the successful experiences of the Grameen Bank in Bangladesh and the Self Employed Women's Association in India. The scheme targets women with household incomes below NRs2,500 per annum, and the loans offered vary from NRs500 initially up to NRs10,000 in the most successful cases. The repayment rate is 70 per cent.

Source: Assessment of Production Credit for Rural Women: Towards future strategies, UNICEF Nepal, May 1996.

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