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Kathmandu — Former Finance Minister and Economic Development Advisor to the Government of Nepal, Dr. Yubaraj Khatiwada, has emphasized the need for specialized financial institutions dedicated to the development and transformation of the agricultural sector.
Speaking at the 24th anniversary celebration of Small Farmers Development Microfinance Financial Institution Limited held in the capital on Sunday, he highlighted the necessity of institutions specifically working for the expansion and modernization of agriculture.
Recalling the significant role played by Small Farmers Development Microfinance in engaging small farmers in agriculture, livestock, and income-generating activities, Dr. Khatiwada argued that microfinance institutions must focus on linking their programs with production-oriented activities, or risk long-term sustainability challenges.
He expressed satisfaction over the way Small Farmers Microfinance has worked as a model in this regard, stating that institutions should not only disburse loans but also ensure that members can generate income from the loans they receive.
He noted that due to the institution’s demonstrated effectiveness and the proper utilization of government support, even international agencies have developed confidence in collaborating with it.
Recalling the abundant opportunities for enterprise and income generation through agriculture and livestock in Nepal, Dr. Khatiwada stressed the importance of shifting from individual to group-based production and income generation models.
He pointed out that markets for meat products such as buffalo and pork from Nepal have already reached third countries, and by ensuring market guarantees and promoting the production of healthy livestock, farmers' incomes could significantly increase.
“For this, specialized financial institutions with targeted programs are needed,” he said, encouraging Small Farmers Microfinance to move further ahead in this direction.
Dr. Khatiwada also suggested that alongside production and marketing, institutions should now focus on storage, processing, packaging, and branding to further uplift farmers' incomes.
Addressing issues in the cooperative and small savings sector, he noted that irregularities in cooperative institutions have increased in recent times due to deviations from cooperative principles. However, he expressed confidence that these problems would gradually be resolved.
To tackle rising financial irregularities, Nepal Rastra Bank’s Bank and Financial Institutions Regulation Department has already implemented new ‘Savings and Credit Cooperatives Guidelines 2081’ effective from Chaitra 21, 2081 B.S.
At the program, institutional chairman Khem Bahadur Pathak acknowledged problems in some cooperatives due to poor institutional governance. He noted that challenges arose when directors and staff failed to stick to their defined responsibilities, even as a nationwide campaign is underway to address such issues. He highlighted that cooperatives can positively impact communities and that reform must begin from within.
Small Farmers Development Microfinance currently works with 1,710 partner institutions across 77 districts, reaching 22 lakh families and 88 lakh members, providing wholesale credit, capacity building, technology transfer, and support for youth entrepreneurship.
Chairman Pathak also shared that the institution has successfully included historically marginalized communities such as Dom, Chamar, Musahar, Harijan, Dhobi, Dhawal, Chidimar, Pattharkat, Paswan, Chepang, Bankariya, and Raute.
At the anniversary event, CEO Dr. Shivaram Prasad Koirala remarked that cooperatives and microfinance institutions with honest leadership face no major obstacles. He cited examples of institutions overcoming financial challenges and even distributing profits to members, asserting that Small Farmers Agriculture Cooperatives continue to deliver commendable results despite difficulties.
Nepal’s Small Farmers Development Project began in 2032/33 B.S., and in 2058 B.S. it was established as Small Farmers Development Microfinance Financial Institution Ltd., previously registered as Small Farmers Development Bank. Its founding shareholders include the Government of Nepal, Agricultural Development Bank, Nepal Bank, Nabil Bank Limited, and other banks, financial institutions, and 231 small farmer cooperatives.
The institution currently has a paid-up capital of NPR 4.31 billion, with 38.9% owned by banks and financial institutions, 27.45% by small farmer cooperatives, 2.36% by international financial institutions, 30.06% by citizens, and 1.23% by others.
In addition, there are 902 small farmer cooperatives, 808 other cooperatives and microfinance institutions, totaling 1,710 partner institutions.
Its target groups include Dalits, indigenous nationalities, marginalized communities, and poor small farmers, who have achieved notable success in livestock, fish farming, poultry, vegetable farming, and high-value crops through the institution’s financial support.
On the occasion, awards were presented to the best-performing branches and partner institutions across different categories. The awardees included Nepalgunj branch as the best branch office, Taratal Small Farmers Agricultural Cooperative from Bardiya as the best national-level partner cooperative, Matribhoomi Microfinance Financial Institution as the best partner microfinance institution, Hami Nepal Savings and Credit Cooperative Limited from Jhapa as the best cooperative institution, and Bhagwati Kalapani Small Farmers Agricultural Cooperative Limited from Kavre as the best Kathmandu branch-level partner institution.
Additionally, Thakur Shrestha (office assistant) and Gun Bahadur Gidel (driver) were also honored for their contributions.
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