Nepal Agricultural Market Development Programme (NAMDP) Phase II

Terms of Reference
Service provision for operation of Sahaj Challenge Fund (SCF)

1. Background

1.1 Sahaj – Nepal Agricultural Market Development Programme (NAMDP)

The Nepal Agricultural Market Development Programme (NAMDP), also known as Sahaj (Nepali for
'facilitate' or 'make easier'), is designed with three successive phases spanning across a 12-year
horizon. Sahaj's objectives are based on a vision of a thriving and inclusive agriculture sector, aiming
to grow employment and income for Nepal's rural population.

Sahaj operates under a bilateral agreement between the Government of Nepal and the Government
of Switzerland. Sahaj is a Swiss Agency for Development and Cooperation (SDC) project, implemented
by a consortium of Swisscontact (as the lead agency) and the Center for Environmental and
Agricultural Policy Research, Extension and Development (CEAPRED). The programme focuses on
Province 1.

NAMDP Phase II builds on the work done in the previous phase, but shifts focus on forward market
linkages, strengthening the commercialisation and export of the country’s agricultural produce. The
second phase will run from December 2020 until November 2024. Using the MSD approach, the
programme will provide financial and technical support for new agricultural products, services, and
innovation in Province Number 1. This will increase demand for smallholders’ produce, including them
in value-added supply chains and building resilience in rural communities through higher employment
and income.

NAMDP’s slogan “partner for innovations in agriculture markets” will be paramount in Phase II – a
strong focus on supporting small agri-businesses with innovative services in the province. This will be
done through three pillars supporting i) agriculture services, ii) non-agriculture services, and iii) the
overarching business environment. Under these pillars, the programme will identify and address
constraints to innovative and sustainable agriculture products and services. This includes addressing
policy bottlenecks and unlocking potential for closer collaboration between the government and the
private sector. NAMDP will build a portfolio of interventions (support for Small and Medium Enterprise
partners), starting in the maize, dairy, cardamom, and vegetable sectors. Additionally, the programme
will support the government’s efforts to strengthen the federal structure by working closely with
provincial and local government units.

Sahaj-NAMDP Phase II objective is to support market system transformation to achieve the goal:
"women and men, including from disadvantaged groups, find employment and increase income.”
Three interlinked outcomes contribute to this goal, with Outcome 2 & 3 acting as steppingstones to
achieve the goal.

● Outcome 1: Agribusinesses, particularly SMEs increase trade value of agricultural produce in

key value chains.
● Outcome 2: Agriculture and Non-Agriculture Service Providers offer innovative
services/products.
● Outcome 3: Sub-national and national government provide a more enabling environment for
businesses and SME growth, particularly in agriculture.

Phase II’s theory of change posits that a vibrant agro-processing drive is needed to increase value of
agro-products traded domestically (outcome 1). As Agri-businesses are characterised as a significant
Nepal Agricultural Market Development Programme (NAMDP) Phase II

employer for women, often ranging from 50 to 90% employees (WB, 2008), they have potential to
contribute to inclusive employment goals. To this end, Phase II will strengthen the provision of support
services to agri SMEs, including through innovation (outcome 2) and contribute to a favourable
regulatory environment that encourages coordination in investment, trade, and business growth
(outcome 3). The rationale behind this is that a better enabling environment will support changes in
behaviour at service provider level, which is needed for agribusinesses, especially SMEs, to source
agri-products locally and increase domestic and international trade.

1.2 The Sahaj Challenge Fund (SCF)

The Sahaj Challenge Fund is aligned fully with the overall programme objectives of NAMDP Phase II.
As such, the fund intends to contribute to increasing employment and value-add in the agricultural
sector of Province 1 in Nepal.

Specifically, the SCF will be used to solicit innovative ideas to address some of the most challenging
problems and obstacles identified in this sector. Basis for this analysis will be the Phase II project
document and sector studies done as a precursor to Phase II. These documents shall be made available
after the selection of the consulting firm for challenge fund implementation. In addition, the project
team will use its knowledge and expertise to report on evolving circumstances and identify additional
challenges to be addressed where relevant.

Importantly, the Fund will aim to address those challenges where disruptive, ‘break-from-the-past’
type innovations are considered key to move the sector forward. The Fund aims to solve persistent
bottlenecks in the private sector functioning of agriculture in Province 1 and contribute to a higher
level of commercialisation and economic value-add in this sector.

1.3 Sahaj Challenge Fund: Purpose of this assignment

NAMDP wants to be effective in supporting innovation and investments in the overall agri sector, while
respecting the fundamentals of its market systems development approach. NAMDP has till date
implemented two rounds of challenge fund. Based on experience of those engagements, NAMDP has
developed a 9-step process for entire challenge fund implementation. By June 2023, NAMDP intends
to implement additional rounds of CFs. The additional themes could possibly include: 1) Sahaj Banking
Challenge, 2) Sahaj Product Improvement and Development in the priority sector, 3) Sahaj Packaging
and Branding Challenge. This call for proposal specifically focuses on Sahaj Banking Challenge, which
will be implemented first. For further detail on the banking challenge, please refer annexure. Other
themes will be implemented subsequently. Based on current experience of the two rounds, and for
effective implementation of proposed themes under the challenge fund, NAMDP intends to uptake
services for effective implementation of SCF.

This RfP refers to the assignment of a consulting firm that has a sound understanding and substantial
experience in designing and implementing challenge funds in Nepal with strong presence,
understanding and expertise in agriculture market system development. The consulting firm will work
closely with the project team of NAMDP, which will guide the firm during the contract period and
ultimately be the key decision maker.

The SCF is guided by principles such as competitive process, innovation, cost sharing, scalability,
transparency, additionality, competition, reciprocity, impact, gender equality and social inclusion.

NAMDP now seeks services from a qualified and reputed organisation(s) to perform the tasks (stage
1 to 9, detailed in section 2) and implement further rounds of challenge fund. Consulting firm shall
Nepal Agricultural Market Development Programme (NAMDP) Phase II

implement stages of the challenge fund on behalf of NAMDP and shall adopt entire implementation
mechanism as designed by Swisscontact for NAMDP.

2. Scope of the work for the consultancy assignment

The broad objective of the assignment is to design, implement and assess the interventions that come
from the identified themes of the challenge fund.

The consulting firm will work under the supervision of NAMDP as its extended team. It will follow (and
eventually contribute to the vision and strategy of NAMDP Phase II. Along with design and
implementation, the consulting firm will strictly follow the Monitoring and Results Measurement
(MRM) system (DCED standard) used in NAMDP. The consulting firm shall also be responsible for
processing payments against the agreed upon deliverables, milestones and terms and conditions of
the agreement that will be signed with the winners and recommending disbursement to NAMDP.

The deliverables for this assignment can be divided into following stages:

Stage 1: Build Support Systems and background work

Contribute to design of the conceptual framework, define and refine concept of the identified theme(s) of
the SCF1
Gather and prepare informational and promotional material
Customise website and current social media sites such as LinkedIn (relevant info, server hosting to receive
applications, FAQ), manage social media pages and respond to queries, email setup
Translate customised application package into Nepali, if required
Designated HR and telecommunication team to handle inquires and assist during the application process
Develop workplan with milestones and timeline
Decide whether the round will have a one-stage application process or a two-stage application process2
Identify and on-board an expert(s) in the identified theme who can help design the scorecard(s),
application(s), and will be involved in assessment of applications

Stage 2: Conduct Promotions Calling for Applications

Prepare for Kathmandu and/or Biratnagar press meet
Organise Kathmandu and/or Biratnagar press meet
Prepare and circulate media articles, news, interviews
Prepare and circulate prepared promotional materials
Conduct panel discussion/open house events/webinars if required
Other promotional activities-jingle, videos, digital, social etc.
Email, SMS, Referral marketing etc.
Stage 3: Scout Potential Applicants
Commence scouting potential applicants
List down the potential applicants
Mobilise team on the ground to encourage potential applicants

1
Analysis of the underlying reasons for systemic constraints and the possible market-based solutions to address
to the systemic constraints that can be potentially proposed by the challenge fund applicants. While the
consulting firm does not need to propose market-based solutions, they should be cognizant of solutions that
meet the most important results, i.e., disruptive innovation, commercial viability, and their resonance with the
overall programme objectives of NAMDP, thereby facilitating changes in the market system.
2
A two-stage application process reduces the transaction costs for both applicants and organisation-NAMDP
team by eliminating proposals that are unlikely to be awarded grants at the first application stage. It is perhaps
a better way to filter and choose better proposals.
A one-stage application process makes sense if applicant’s business model are more mature and when decisions
need to be fast tracked.
Nepal Agricultural Market Development Programme (NAMDP) Phase II

Use relevant networks, associations, business member organisations to scout and encourage applications
(business membership organisations, provincial governments, other relevant networks etc.)
Conduct FAQ sessions

Stage 4: Gather applications and guide applicants

Depending on whether there will be a one-stage or a two-stage application process, have application
pack(s)3 ready
Have translated application pack ready, if required
Have website ready to receive applications
Assign physical locations to collect applications
Answer applicant queries through phone, emails, website, in-person, social media sites
Help applicants fill application form
Fix first deadline to submit application
Monitor application status and inform NAMDP periodically
Fix extended deadline to submit application (if required)
Transcribe received applications into a common format for assessment panel

Stage 5: Complete initial screening of the applicant

Identify and assign one to two experts who will be part of the assessment panel 4 relevant to the theme of
challenge fund being implemented
Prepare screening scorecard and develop screening manual
Pre-shortlist applicants (for instance in high/medium/low potential) for the assessment panel
Conduct initial screening assessment for shortlisting applicants
Complete screening, score and create short list of applicants for next round
Create format for feedback (successful and unsuccessful applicants)
Communicate feedback to rejected and selected shortlisted applicants

Stage 6: Refinement of proposals submitted by the shortlisted applicants

Work closely with the shortlisted applicants to develop a business plan/proposal that is commercially viable
and in-tune with the project’s impact goals. It is envisaged that maximum ten business proposals per theme
would need to be developed.
Business plan may include, but not be limited to, topics such as executive summary, project description
(relevance to project’s impact indicators), market analysis, innovation, business model, competitive
advantage, competitive landscape, growth plans, marketing & sales strategy, operational plan, financial
plan & projections, SWOT & Five Forces analysis, impact & inclusion, scalability & sustainability
Design intervention specific deliverables of the applicants
Prepare final scorecard
Assist to conduct final scoring
Forward detailed recommendations (for the winners) to the SCF Committee and provide
justification/clarification sought by the SCF Committee
Create format for feedback (successful and unsuccessful applicants)

The SCF committee will make the final decision on the winners and awards. The selected consulting
firm will further provide following support:

Stage 7: Fund Awards

Work closely with the project’s team to communicate the approved/rejected decision
For the winners, NAMDP shall negotiate budget, terms and conditions to receive the award
The consulting firm will assist NAMDP in preparing legal agreements pertaining to the fund award

3
First stage should outline the project and how it meets the eligibility criteria. Eligible ones which get selected
receive support to develop the business proposal for the proposed project.
4
Assessment panel may include members of NAMDP, donor, expert(s) assigned by consulting firm
Nepal Agricultural Market Development Programme (NAMDP) Phase II

The consulting firm shall organise partnership signing ceremony and circulate fund awards in relevant
media

Stage 8: Monitoring
Work closely with the project’s MRM team to develop Intervention Plans
Monitor on the ground implementation of the proposed solutions
Work closely with the project’s MRM team to monitor the milestones, conditions as detailed in the
agreement
Work with the project’s MRM team to track the relevant indicators and qualitative information for adaptive
results management
Submit periodic monitoring reports to MRM as well as project ream

Provide relevant information and data as required by the consultant for impact assessment of each
intervention

Report any success stories that arises from any interventions

In addition to the above, the MRM activities will include the following (but will not be limited to):
Intervention plans
Cases and stories of the interventions
Periodic monitoring reports
Intervention assessment reports
Relevant supporting evidence documentation (e.g., meeting minutes, field visit reports, event/activity
participation lists, pictures etc).

Stage 9: Payment processing

Oversee financial and contractual compliance as per terms and conditions, milestones, deliverables of the
agreement when the partner (CF winners) requests for payments
Recommend disbursement to NAMDP finance team. Disbursement decision rests with NAMDP team.

2.1: Principles of implementation

I. The ‘consultant’ with close collaboration with NAMDP, will operate to implement and manage
challenge fund within the scope of market systems development. Consulting firm is aware of
their temporary presence in the market and respect the market systems development
principles.
II. The consulting firm must ground its work in a thorough understanding of market dynamics
and how the challenge fund is used as a vehicle to “challenge” the private sector to identify
innovative (generally disruptive) solutions that unlock market constraints and by doing so can
have socio-economic benefits for poor people; but also be commercially viable;
III. The consulting firm must be guided by the understanding that the challenge fund aims to
enable innovative and inclusive business models to be tested by tipping investment decisions
from ‘no to go,’ overcoming the purely commercial risk hurdle in return for potential social
development benefits;
IV. The consulting firm must recognise that challenge funds are a means to trigger innovation and
speed up implementation of new business models which combine potential commercial
viability with impact, particularly where commercial returns are uncertain, and the investment
is therefore risky;
V. The consulting firm would harness the strengths of the private sector to generate and test
new ideas and supports, refines and selects such ideas through a transparent process of
competitive application rounds;
VI. The consulting firm recognises that the majority of the Sahaj Challenge Fund support is
expected to be provided through conditional grants to the winners. Technical assistance
Nepal Agricultural Market Development Programme (NAMDP) Phase II

where required may also be provided. The consulting firm, on their own or through relevant
experts, may also provide technical assistance to the winner in those areas where the latter
lacks the knowhow in case the winner indicates that such assistance is required.
VII. The consulting firm must be adept at adaptive management. Market dynamics are subject to
change and being engaged in a market to attain the impact goals should lead to further
learning about the market vis. a. vis. results and hence facilitation cannot be reduced to a
linear process of planning and implementation but must be reflective of the dynamic nature
of the market.

2.2 Mode of implementation

The potential and interested organisation and/or consortium of organisations have the flexibility of
completing the deliverables on their own or through further hiring consultants and/or staff. The
consulting firm will be liable to NAMDP while the extra hiring that the consulting firm makes will be
liable to them.

The consulting firm will implement the activities through its team in close consultation with relevant
NAMDP team. Relevant members of the NAMDP team and consulting firm will meet as necessary to
implement the activities under the nine stages.

2.2.1 Team structure

The team structure will be submitted by the consulting firm along with the proposal, as per the
program requirement and in line with the proposed budget.

Activities planned under the nine stages requires well-qualified staffs and/or consultants with the
ability to do research, analyse, develop strategies, monitor and ensure compliance. They would use
effective and top-of-the-line marketing and promotion to create a buzz around the themes, encourage
applications, and guide applicants. They would have to develop commercially viable business plans,
understand the fine line between ‘thinking along with’ and ‘working on behalf of’, perform MRM
activities and have open attitude to continuously learn, change and adapt to changing scenarios.

NAMDP has proposed a team structure (as elaborated in section 5, 5.1 Technical Expertise Criteria).
The proposed personnel’s résumé are to be attached with relevant experience which will be deemed
helpful to the assignment.

3 Required expertise

● A thorough understanding and work experience related to designing, implementing and

managing challenge funds, specifically in themes related to agriculture market system
development
● Legally registered in Nepal with over 5 years standing experience
● Prior experience working with various ecosystem actors
● Exemplary network of media and relevant actors, associations etc. to receive quality
applications
● Ability to handle tasks independently
● Availability of resources to conduct the activities efficiently
● Experience working with development projects
● Excellent analytical, communication and report writing skills
● Understanding of business, economic and financial aspects
● Prior work experience & offices in Province 1 will be an advantage
Nepal Agricultural Market Development Programme (NAMDP) Phase II

4 Deliverables
The deliverables for this assignment will be as per the table outlined in the duties and responsibilities
(section 2). Additionally, the consulting firm will provide following deliverables to NAMDP:
• Monthly report containing activity overview of previous month, activity plan for next month,
and impact and monitoring data/report
• Documentation(s) and materials used during the implementation of nine stages
• Minutes of meetings and decisions made by assessment panels and SCF Committee
• Half yearly review or periodic report describing interventions, impact, learning, etc.
• Reports such as field updates, activity status etc. as per completion and as per request by
NAMDP
• MRM and communication related data and documents as and when required
• Project completion report on completion of the assignment contract
• Other related tasks assigned by NAMDP

5 Request for Proposal and selection method

The potential and interested organisation and/or consortium of organisations are requested to submit
documents showing their keen interest to undertake the proposed assignment.

Any one organisation and/or consortium of organisations is encouraged to bid for implementing the
SCF. The proposal should include two components, i.e., 1. Technical proposal and 2. Financial proposal.

The consulting firms are required to submit both the technical and financial proposal within the
stipulated deadline. NAMDP shall employ Quality-Cost-Based-Selection (QCBS) method [Technical
Proposal Weightage: 75% and Financial Proposal Weightage: 25%].

Following documents need to be submitted within the date stipulated in this RfP:
• Organisation profile
• Registration certificate of the organisation along with latest renewal certificate
• VAT registration certificate if applicable
• Latest Tax clearance certificate of FY 77/78
• Audit report of last fiscal year 77/78

Organisation(s) missing any document mentioned in the eligibility criteria will not be outrightly
rejected. NAMDP team will pursue with the bidder to provide the missing documents within 5 days to
ensure that they are included for further assessment. In case the bidder fails to submit the missing
documents within the extended time period, they will be disqualified.

Before awarding and signing the contract with the selected organisation, NAMDP may undertake an
assessment of the organisation’s financial and management capacity and the relevant practices,
through one or more meetings and visits.

Both the proposals must be in two separate PDF files/envelopes.

The technical proposals shall be evaluated first. Top three technical proposals shall be notified, and
their financial proposal shall be opened.

The below is the basis of technical and financial evaluation criteria.

5.1 Technical evaluation criteria

Nepal Agricultural Market Development Programme (NAMDP) Phase II

S.N. Heading Points

1 Overall Response 10
1.1 The understanding of the assignment by the proposer and the
alignment of the proposal submitted with the RfP

1.2 Completeness of response

1.3 Overall concord between RfP requirements and proposal

2 Organisation, key personnel, and relevant past work experience 35

2.1 Range of depth of the organisational experience with similar

assignment. Knowledge and experience on designing, running
and monitoring a challenge fund for at least 2 years

2.2 Sample of previous work experience

2.3 Relevant experience and qualifications of the proposed team for

the assignment. May include:
Team Leader/Focal Point-responsible for project management,
thought leadership and liaison with NAMDP;
Communication Expert-responsible for promotion and marketing,
network building;
Technical Expert(s) (including business plan development)-key
person(s) for the theme and delivery of the project;
Implementation Officer-seconding the team leader for project
management, implementation, quality assurance,
standardisation of business plans and reports;
Monitoring Officer-prepare intervention plan, monitor
milestones and track indicators. To be based in Biratnagar.
Admin and finance officer
Support officer for telecommunications, query handling etc.

3 Proposed Methodology and Approach 30

3.1 Work plan showing detail deliverables, implementation plan in

line with the project.
Proposed work plan, duration, and approach of delivery of the
tasks (between stages 1 to 8) as per the RfP. In addition, the
proposal should also include the following:
-Concept plan
-Strategies and modality of execution
-Strategic partners and stakeholders
-Activity details and action plan
-Exit plan

Total 75

5.2 Financial evaluation criteria

The financial proposal will be evaluated using the below criteria:

SN Basis for Scoring/Criteria Marks Remarks

A Total budget 10 Lowest will get highest score.

Nepal Agricultural Market Development Programme (NAMDP) Phase II

B Consistency with technical proposal: Is the budget in line with 15 Highest consistency will get
the technical proposal? Are there enough resources allocated higher scores.
for being able to implement the proposed activity? Quality of
out of pocket expense such as marketing/promotion and their
proposed cost will be considered here.
Total 25

In terms of scoring the total budget criteria (SN A), the lowest bidder of the total budget will get 25
marks. Financial proposal from the bidders will receive pro-rated points on the relationship of the
bidder’s prices to that of the lowest evaluated cost. In case of scoring the consistency of the proposed
budget with the technical proposal criteria (SN B), an average score of the RfP assessment panel
members will be used to determine the final financial score.

NAMDP reserves the right to negotiate budget with the bidder(s) prior to awarding the contract. In
case of unsuccessful negotiation with the first placed bidder, bidder with next highest technical score
will be invited for negotiation.
Nepal Agricultural Market Development Programme (NAMDP) Phase II

5.3 Formats for proposal submission

Format for technical proposal submission can be referred from the technical evaluation criteria (section 5.1). Format for financial proposal is provided below.

Bidders are requested to develop financial proposal to implement one round of challenge fund.

Cost Head Unit Type

Unit Number Total
Rate of Units (NPR)
(NPR)
A Salaries/Remuneration: Management, intervention design,
implementation, consulting, monitoring, admin and finance Month/Days
staff
A1 Team Leader – Main Focal Point Months 3
A2 1Technical Expert -Theme Months 4
A4 Technical Expert/Consulting-Business Plan Development Months 4
A5 Technical Expert/Consulting-Business Plan Development Months 4
A6 Implementation Officer Months 18
A7 Monitoring Officer Months 12
A9 Admin and finance officer Months 15
A10 Support staffs for communication, query handling Months 6
A11 Communication officer Months 4
Sub-total (A)
B Out of pocket expenses5
B1
B2
B3
…

5
May include: travel costs; accommodation, per diem; marketing, promotion, advertisement; website/server; press meets and partnership signing event and others
deemed necessary by the proposing firm to complete the assignment
Nepal Agricultural Market Development Programme (NAMDP) Phase II

Sub-
total (B)
Total
[C] =
A+B
VAT [D]
Grand
Total
[C+D]

It is to be noted that the activities and direct costs related to the implementation of the assignment shall be reimbursed as per actual invoices.
Nepal Agricultural Market Development Programme (NAMDP) Phase II

6 Deadline for submitting the proposal

Technical and financial proposals along with other details and documents must be submitted in PDF
format addressed to [email protected] by 11:59 PM of September 27, 2022.

7 Contractual arrangement
The assignment is expected to last around 1.5 years to complete the nine stages for one theme of CF.
The detailed timeline depends on the proposed work plan and will be discussed after the first meeting
with the selected organisation and is subject to change as per need.

NAMDP will enter into contract with the successful bidder initially for the banking theme of the
challenge fund. Based on the performance of the bidder of completion of early stages, contractual
agreements for implementing the further themes shall be negotiated and finalized. Bidders to note
that the proposed financial proposal (unit costs for HR salaries and out of pocket expenses) shall be
used as reference for implementation of further themes of the SCF.

8 Terms of payment
The payments will be made as per NAMDP’s rules and regulations and will be discussed with the
winning bidder before signing the contract.

9 Rejection of proposals, tender cancellation

Should any proposal fail to comply with terms and conditions stipulated in this RfP, or be incomplete,
conditional or obscure, or contain additions not called for or irregularities of any kind, or does not
respond to important aspects of the RfP or if it fails to achieve the minimum technical score, it may
be rejected as non-responsive.

NAMDP reserves the right to accept or reject any proposal, and to annul the bidding process and reject
all proposals at any time prior to contract award, without thereby incurring any liability to the
participating organisation(s).
Nepal Agricultural Market Development Programme (NAMDP) Phase II

10 Annexure

Sahaj Banking Challenge

Nepal’s small and medium-sized enterprises (SMEs) are important engines of job creation, innovation
and growth but limited access to affordable and suitable financial services continues to limit their
potential. Lenders consider lending to agri-SMEs as riskier and costlier than with larger businesses,
and thus limit their exposure.

The Sahaj Banking Challenge aims to stimulate agri-SME lending in Province 1 by Banks and Financial
Institutions (Class A and Class B) through a mix of innovation support and cost-sharing. Banks are
invited to submit proposals on innovation of their loan products, credit processes, add-on products
and services, or delivery model through a call for application.

Support is available for the initial phase of research, development and roll-out of an innovation. On
top of this, the banking challenge may offer temporary cost-sharing on loan origination, with a
maximum of 2% of the loan portfolio value.

At least 3 to a maximum of 7 proposals will be considered and funded – the amount per initiative will
depend on proposals received and the type of support requested that reflect the principles of the
challenge fund. The final decision will be made by the Sahaj Banking Challenge committee.

Non-exhaustive examples of potential innovation could be:

Loan tied up with business advisory/development services:

Banks mainly evaluate/assess loans on the borrower’s repayment capacity. Many SMEs can perform
better (and thus be in a better position to repay) if they improve their managerial and operational
capabilities. Improving managerial and operational capabilities fall under the area of business
development services, which are essentially experience goods. Their demand is weak because SMEs
do not want to pay when benefits are uncertain and because they do not want to bear additional cost.
If qualified for a loan, resource allocation from banks and CF can incentivise SMEs to avail such services
by initially paying for them (for a period of 6 months). The remaining 6 months fee of the BDS service
provider to be fully paid by the SMEs.

Innovative lending practices:

• Lending based on borrower’s cash flow and earnings in addition to credit-score based lending
for agri-SMEs. Assess and manage credit risk through digitisation.
• Provision of specially tailored fixed assets and working capital credit lines to anchor firms and
its suppliers (channel financing for hub and spoke model).
• Warehouse receipt financing.

Lending product using agents:

Bank will train minimum of 140 individuals from different marketplace in Province 1 to appoint them
as dedicated agents for sourcing clients. The agent will earn 10% interest income on performing loans.

- Loan size: 60% of total limit or up to 90% of collateral value

- Security: Fixed and current. As acceptable by the bank
- Target clients: Registered businesses
- Top up: Automatic eligibility for top up after a year up to 25% of most recent limit, higher top
ups will be provided with separate assessment; no additional collateral required for any top
ups.
Nepal Agricultural Market Development Programme (NAMDP) Phase II

Technology enabled literacy programmes:

Innovative literacy programmes including interactive voice response (IVR), video and animated films,
etc. will be provided to the target beneficiaries. The content of these programmes should link them
with any of the financial products offered by the innovative bank. The literacy programme will
digitalise pre-group training, financial literacy, business plan development, fund management etc. and
these modules will be delivered to the agri-SMEs virtually.