Scaling up investments in agriculture in Nepal

 

One of the key objective of government’s Agriculture Development Strategy is to commercialise the farm sector in order to generate economic gains for Nepal and its people. This means agriculture must move up from subsistence level.

 

While agriculture is the most important economic sector for development with contribution of over 30% to GDP and over 65% of employment for the country; it has, unfortunately, also remained the worst faring sector with only 2.9% growth rate through 2006-2015, as compared to 3.2% in industry and 5.3% growth in services. Investment of commercial banks in the sector hovered just over 7% in 2015.

 

In this context, on behalf of Asian Development Bank, WLC carried out an assessment on the opportunities, challenges and way forward for facilitating medium and large-scale financing in agriculture.

 

Through a qualitative research with key stakeholders – government officials, banking representatives, development partners, agribusiness entrepreneurs, and relevant non-governmental organisations – and thorough review of financing in agriculture in Nepal, this assessment study identifies the key constraints that are impeding medium and large-scale investment in the agriculture sector. Taking constraints into account, it suggests policy-level interventions, while also creating an environment that draws BFIs and entrepreneurs to invest in the sector.

 

The report was discussed in an interactive session where relevant stakeholders together agreed on a plan to take this initiative forward and set pace to innovative agribusiness financing models in Nepal.

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