Poverty Alleviation Fund in Nepal Finds Some Success


The Poverty Alleviation Fund in Nepal was created by the Government of Nepal in order to attempt to eliminate poverty within the country. This fund is officially supported by not only the World Bank but the International Fund for Agricultural Development (IFAD).

The fund is set up in 65 different districts in the country, and is based on four main components: income generation, capacity building, social mobilization, and rural community infrastructure. The fund has been in existence for a few years with a large amount of resources going towards the program. At this time, an impact evaluation of the Poverty Alleviation Fund in Nepal is underway to see how well it has been going and if the original ideals of the fund have been met in the different districts in which it takes place.

Through on-site interviews, a development practitioner determined that most of the farmers agreed that the Poverty Alleviation Fund in Nepal has made their quality of life better. This has been done in two ways: training and financial support. The financial support was given for certain small-scale ventures like rearing livestock or poultry.

Within the Poverty Alleviation Fund in Nepal, two subgroups are identified: poor farmers and very poor farmers. The fund encourages groups of 20 or 25 members to get together and create a “revolving fund.” This revolving fund allows the groups to give loans to the group for activities that would stimulate the economy and create more money. The government itself, as well as farmers within the group, contribute to the revolving fund. Along with these investments to help each other raise money, many of the group members are encouraged to create savings accounts for the “extra” money in order to save up for the future.

The primary success of the fund has been in supporting farmer incomes, but the program plans to give more focus on the component of rural infrastructure. Many farms are in need of irrigation facilities, and are currently unprotected from nearby rivers or rivulets, which negatively impact their farm life. Another minor concern is providing storage facilities for the family farmers. The Poverty Alleviation Fund in Nepal has had great success so far, but will continue to focus on other areas of improvement, in order to protect family farms and their products.

In addition to income creation, the fund has been successful in facilitating social mobilization. By creating groups of farmers for loans, ¬†different farmers are encouraged to interact positively with each other. It creates a social support system as well as a financial one. Overall, while there are some areas that need improvement, the fund itself has greatly helped local farmers within Nepal, and will continue to do great things for the country based on the agricultural sector’s growth.

– Corina Balsamo

Sources: The Himalayan Times, World Bank
Photo: Sydney City Rotaract


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