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Rural Credit

C redit availablity is essential a socially inclusive agricultural and rural mechanization process. NAEF began to recogonized this early on when our target farmers were not buying the machinery. In large part, the problem is the poor have little or no access to new or even traditional credit (money lenders). Even if micro credit/NGO programs do exist for the poor they the "micro" orientation is found wanting as many of these resource conserving machinery technologies require "mezzo" credit. And the providers of this higher levels of credit, if avaialble generally refuse to lend to farmers with little or no land to offer in colateral.

NAEFs first attempt to leverage mezzo credit for poor farmers failed a\fter months of meetings and planning with other partners the Agricultural Development Bank/Nepal's Board of Trustees refused the National Planning Committee and Finance Ministry's request to utilize a 700,000 USD grant from the Poverty Allieviation Fund to provide no collateral loans to poor and landless farmers, as their rules did not allow for such loans to farmers.

Several years ago NAEF began reporting in MECHNET about the trend in India of manufacturers and importers of agro-machinery to form tie ups with local and regional banks that would aid in streamling the credit issuance. This led to NAEF beginning to look around for such a situations fo ourselves and the Association of Agro-Machinery Importers which led to NAEF's MOU with Bank of KAthmandu for provision of credit to our farmers. Although none of the AAMI members have made such a tie up others have begun to provide credit through their own companies.

Follow below links to learn more about our efforts

Report- ational Agricultural Mechanization Committee, Chaired by the Secretary of Agriculture and Cooperatives, in the Government of Nepal.

BOK MOU - Bank of Kathmandu