Himalayan News Service

Kathmandu, May 17:

A ‘pre-fact finding mission’ of Asian Development Bank (ADB), Manila is in the capital in order to take stock of rural credit scenario of the Agricultural Development Bank Ltd-Nepal (ADB-N).

According to a source at ADB-N, the ADB mission is headed by Ashok Sharma, micro and rural finance specialist working in the Manila-based ADB. The two-member mission is exclusively taking stock of ADB-N’s ‘rural credit system’.

The two-week long pre-fact finding mission is here following the recent decision of the Nepali cabinet that decided to finance ADB-N for its restructuring process with about nine billion rupees loans. Out of this, about Rs 4.5 billion is being provided by the government in the form of preference shares while the rest Rs 4.5 billion is being provided by ADB.

The government had also passed a proposal to convert ADB-N into a limited company, which is also one of the components of the reform being undertaken. The reform is exclusively focusing on strengthening rural credit to serve the poorest of the poor.

“The mission has an objective of taking stock of how the rural credit scenario is performing in Nepal through ADB-N at a time when the conflict is gaining momentum around the rural people,” said the source.

The ministry of finance has already formed a monitoring unit to oversee reforms going on in ADB-N. Providing rural loans and conducting micro-credit programmes have become crucial to ADB-N’s operation. ADB-N has proved invaluable over the years in helping spread rural development programmes.

The donor and local experts are trying to detach the ADB-N, predominantly considered as a rural bank, from political influences in the days ahead, said the source. ADB-N provides over 85 per cent of its loans in rural areas. The bank has lent over Rs 92 billion to rural sectors.