A two-day national workshop on “Designing the Agriculture Credit Guarantee Scheme (Agri-CGS)” successfully concluded in Birendranagar, Surkhet. 

Organized by UNDP in collaboration with the Deposit and Credit Guarantee Fund (DCGF), the event brought together representatives from local governments of Jumla, Bajura, and Kavre districts, along with banks and financial institutions, and presented the design and roadmap of the proposed Agri-CGS scheme.

The Agri-CGS is being developed under Nepal’s Joint SDG Fund-supported programme titled “Innovative Financial Solutions for Food Systems Transformation in Nepal”, coordinated by Nepal’s United Nations Resident Coordinator and jointly implemented by UNDP, UNCDF, FAO, and WFP. 

The proposed scheme aims to bridge critical financing gaps for smallholder farmers, cooperatives, and agri-MSMEs in the participating local government areas. The project will capitalize a dedicated, ring-fenced Credit Guarantee Fund (CGF) with USD 1 million, comprising a USD 700,000 contribution from DCGF and USD 300,000 in aggregate contributions from participating local governments. 

DCGF will implement the scheme as a pilot, offering risk-sharing guarantees to above USD 10 million loans issued by financial institutions towards agriculture and agro-value chain activities to unlock rural lending and benefit around 3,000 people from the underserved communities.  

The workshop provided insights into the conceptual framework, implementation modality and financial structure of the proposed Agri-CGS. It also presented how the stakeholders—local governments, financial institutions, DCGF, and implementing agencies—are engaged and their ownership is created within the design of the scheme.

Speaking at the event, Dharma Swarnkar, Assistant Resident Representative at UNDP, emphasized the strategic rationale behind the initiative, underscoring the importance of the Agriculture Credit Guarantee Scheme in bridging financing gaps within the agricultural sector. 

Similarly, Regional Blended Finance Expert, Samuil Shiderov presented global best practices, illustrating how credit guarantee mechanisms can significantly improve access to finance for underserved entrepreneurs and farmers. Ramesh Ghimire, Chief Executive Officer of DCGF, also provided an overview of the Fund’s mandate, existing guarantee products being implemented by the fund, and its strategic interest in partnering with local governments. 

The workshop was attended by Mayors/Chairpersons, and Chief Administrative Officers from nine local governments of Karnali, Sudurpashchim, and Bagmati Provinces. Demonstrating their commitment to the initiative, the participating local governments also presented how those rural/municipalities have prioritized the agriculture, SMEs, and employment generation in their respective plans and budgets. 

Representatives from Nepal Rastra Bank, Nepal Bankers’ Association, and selected banks and financial institutions also participated in the workshop. They shared their valuable insights and experiences regarding the current state of agricultural financing, particularly in Karnali and Sudurpashchim Provinces, and discussed opportunities and challenges in expanding access to finance for farmers, cooperatives, and agri-enterprises in these areas.

This programme is part of the Joint SDG Fund, which is being led by the Resident Coordinator's Office and implemented by UNDP, UNCDF, FAO and WFP.  We would like to sincerely appreciate the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, the Kingdom of the Netherlands, Norway, Poland, Portugal, the Republic of Korea, the Kingdom of Saudi Arabia, Spain, Sweden, Switzerland and the Arab Gulf Programme for Development for their contribution towards a transformative movement towards achieving the SDGs by 2030.

For more information, please contact: 
Monica Upadhyay, Head of Communication, UNDP Nepal, monica.upadhyay@undp.org, + 977-9841343953