Avsar Microfinance Program
Facilitating access to institutional credit & creating platforms for entrepreneurship opportunities.Introduction
Financial empowerment lies at the heart of empowering low-income communities. Illiteracy, low level of wealth, inheritance of debt compounded by inability to service debt borrowed at high interest rates from village landlords lead to vicious circle of poverty for such individuals and families. With an objective to address this prevalent issue in rural parts of Nepal, AF has introduced its first program called “AVSAR Microfinance (Interest Return) Program”.
Under the program, AF collaborates with banks and other financial institutions as its implementation partner to design microfinance lending programs targeted towards low income deprived population. Financial institutions disburse microfinance loans to targeted population and AF provides interest return facility to borrowers on such loans.
AF aims to facilitate access to institutional credit and create a platform to accelerate entrepreneurship opportunities among low income deprived population in rural parts of Nepal.
Program Modality
1. Partnering Financial Institution (FI) identifies the borrower, meeting criteria set by AF for AVSAR Microfinance Program.
2. FI conducts its due diligence, processes and disburses the loans, in coordination with AF.
3. The borrower regularly pays monthly installment on the loan (principal along with interest) to the lending FI.
4. As a reward, AF annually reimburses to the borrower, 50-100% of interest amount that the borrower had paid to the FI, under the condition that the borrower has successfully serviced the loan or paid the due installments in the corresponding time-period.
5. Annual interest reimbursement by AF is done throughout the loan tenure.
1. Partnering Financial Institution (FI) identifies the borrower, meeting criteria set by AF for AVSAR Microfinance Program.
2. FI conducts its due diligence, processes and disburses the loans, in coordination with AF.
3. The borrower regularly pays monthly installment on the loan (principal along with interest) to the lending FI.
4. As a reward, AF annually reimburses to the borrower, 50-100% of interest amount that the borrower had paid to the FI, under the condition that the borrower has successfully serviced the loan or paid the due installments in the corresponding time-period.
5. Annual interest reimbursement by AF is done throughout the loan tenure.
Program Criteria
| Target Population | Under-privileged people and communities with low income in rural areas |
|---|---|
| Districts | Siraha, Nawalparasi, Kapilavastu, Kailali, Dolakha & Taplejung |
| Sectors | Agriculture, Livestock, Small Business Enterprises (Retail Shop, Hotel, Restaurant and others), Small Cottage Industries |
| Loan Tenure Limit | 3 years |
| Loan Size Limit | NPR 3 lakhs |
| Interest Rate | Commercial Bank: 0.5% premium on Bank’s Base Rate Microfinance Institution: Published Rate |
| Women Requirement | At least 70% of Participants |
| Annual Household Income Limit | For Commercial Bank: NPR 2 lakh For Microfinance Institution: NPR 1 lakh |
| Borrower Status | Borrower with no loans from other financial institutions (Non- multi banking Borrowers) |
Partner Institutions
Development
AVSAR Foundation started AVSAR Microfinance Program from the start of Financial Year 2074-75. AF has partnered with 6 Financial Institutions (2 Commercial Banks and 4 Micro-finance Institutions) and implemented the program in all 6 designated districts.
AVSAR Microfinance Program’s development until Magh 2075:
| Total Number of Beneficiaries | 9084 |
| Total Loan Disbursed | NPR 603,525,900 |
| Total Projected Interest Obligation | NPR 95,535,845 |
Program Status Detail until end Magh 2075 (District Wise):
| Districts | Number of Beneficiaries |
Loan Amount | Interest Obligation Amount (NPR) |
Avg. Interest Rate | Women Borrowers | % of Women Borrowers |
| Dolakha | 1,568 | 117,645,000 | 14,416,397 | 18.25% | 1,552 | 99% |
| Kailali | 2,032 | 98,191,400 | 13,828,250 | 18.25% | 2,032 | 100% |
| Taplejung | 646 | 27,499,000 | 3,579,018 | 18% | 646 | 100% |
| Kapilvastu | 1,394 | 65,215,000 | 10,675,595 | 17% | 1,392 | 99.86% |
| Nawalparasi | 1,872 | 186,981,500 | 35,892,778 | 17% | 1,868 | 99.79% |
| Siraha | 1,572 | 107,994,000 | 17,143,807 | 15% | 1,568 | 99.75% |
| Total | 9,084 | 603,525,900 | 95,535,845 | 17.25% | 9,058 | 99.71% |
Program Status Detail until Magh 2075 (Financial Institution Wise):
| Financial Institution | Number of Beneficiaries |
Loan Amount | Interest Obligation Amount (NPR) |
Avg. Interest Rate | Women Borrowers | % of Women Borrowers |
| Chimmek Laghubitta | 5,558 | 280,182,500 | 23,873,463 | 18% | 5,558 | 100% |
| Laxmi Laghubitta | 1,129 | 104,917,000 | 13,530,250 | 19% | 1,129 | 100% |
| NMB Laghubitta | 1,478 | 88,429,400 | 12,714,470 | 18% | 1,462 | 99% |
| Laxmi Bank | 5 | 785,000 | 152,182 | 12% | 5 | 100% |
| NMB Bank | 13 | 3,400,000 | 567,574 | 12% | 3 | 23% |
| Deprosc | 901 | 125,812,000 | 24,410,316 | 18% | 901 | 100% |
| TOTAL | 9,084 | 603,525,900 | 95,535,845 | 17.25% | 9,058 | 99.71% |
| Average Loan Amount per Borrower | 66,438 |
| Average Interest Obligation per Borrower |
10,517 |
| Effective % for Interest Obligation | 16% |
Partner Institutions Branches for Program Execution
AVSAR Microfinance Program is being executed by total 51 branches of partner financial institutions in 6 districts as mentioned below:
| Districts | Partner Institutions Branches Location for Program Implementation | |||||
| Laxmi Bank | NMB Bank | Laxmi Laghubitta | NMB Microfinance | Chhimek Laghubitta | DEPROSC | |
| Dolakha | Charikot | Kirne | Charikot Singati |
Mainapokhari Singati |
Charikot | Charikot Jiri |
| Taplejung | Phungling | Phungling | Taplejung | Phungling | Phungling | |
| Siraha | Lahan | Lahan Golbazar |
Padariya | Phulbariya | Naya Choharwa | |
| Nawalparasi | Rajahar | Sunwal Kawasoti |
Arun Khola Bhumahi |
Arunkhola | Kolhuwa | Parasi Bhumahi Kawasoti |
| Kapilvastu | Taulihawa | Jitpur Gorusinghe Chandrautah |
Bairiyabazar | Odari | Jayanagar | Birpur |
| Kailali | Dhangadhi Bauniya |
Dhangadhi Lamki Masuriya |
Hasuliya Joshipur |
Sadepani | Geta Sadepani Pathraiya |
Durgauli Udasipur |
Gallery
Agreement with DEPROSC
Agreement signing between AVSAR Foundation and DEPROSC Laghubitta
Ramkali Devi Sah & Raje Sah Haluwai from Siraha- First Beneficiary of AVSAR program
Laxmi Bank disbursing its first loan under AVSAR Program
Agreement signing between AVSAR, NMB Bank and Dugar Group to collaborate for AVSAR Microfinance.
Agreement signing between Avsar Foundation and Chhimek Laghubitta Bittiya Sanstha
NMB Bank disbursing its first loan under AVSAR Program
Agreement signing between Avsar Foundation and NMB Bank
Agreement signing between Avsar Foundation and Laxmi Laghubitta Bittiya Sanstha
Agreement with DEPROSC
Agreement signing between AVSAR Foundation and DEPROSC Laghubitta
Ramkali Devi Sah & Raje Sah Haluwai from Siraha- First Beneficiary of AVSAR program
Laxmi Bank disbursing its first loan under AVSAR Program
Agreement signing between AVSAR, NMB Bank and Dugar Group to collaborate for AVSAR Microfinance.
Agreement signing between Avsar Foundation and Chhimek Laghubitta Bittiya Sanstha
NMB Bank disbursing its first loan under AVSAR Program
Agreement signing between Avsar Foundation and NMB Bank
Agreement signing between Avsar Foundation and Laxmi Laghubitta Bittiya Sanstha