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SUSTAINABLE ACCESS TO FINANCE AND LIVELIHOODS II (SAFAL II)

SUSTAINABLE ACCESS TO FINANCE AND LIVELIHOODS II (SAFAL II)

SUSTAINABLE ACCESS TO FINANCE AND LIVELIHOODS II (SAFAL II)

Duration

DECEMBER 2015 – MAY 2018

Budget

$1,468,235

Donor

MERCY CORPS PRIVATE FUND | NEPAL

Sustainable Access to Finance and Livelihoods II (SAFAL II) program aims to contribute to poverty reduction in Nepal’s rural and remote areas through sustainable access to finance, appropriate livelihood opportunities and local institution strengthening. The SAFAL II initiative maintains and extends Mercy Corps’ presence in the East of the country, while supporting and further developing financial services components in the Earthquake Recovery Program (ERP), STEM girls’ education program, PAHAL Food For Peace program and new youthoriented services through Generation Amazing, further cementing Mercy Corps’ leadership in the financial services sector in Nepal.

BACKGROUND

With over 25% of the population living under the poverty line, Nepal ranks amongst the poorest countries in the world and is second poorest in the region (NLSS III, 2011). In Nepal, out of a total population of 26 million, 66% lack access to even basic formal financial services. Mercy Corps Nepal’s Determinants of Resilience research found that access to diverse financial products and services is an indispensable component for successful participation in a market economy, and a strong correlation exists between availability of and access to financial services and a household’s and community’s ability to bounce back better and more quickly following a major shock. These findings highlight the importance of continuing and extending Mercy Corp Nepal’s financial services in risk vulnerable areas across the country.

TARGET AREAS

The SAFAL II program in implemented in Panchthar, Taplejung, Bhojpur, Tehrathum and Sankhuwasabha districts of Eastern Nepal.

METHOD & APPROACH

Mercy Corps employs various approaches to financial services expansion, such as cooperative linkages, deficit-subsidy partnerships, innovative models and use of mobile technologies and livestock credit guarantee for financial inclusion together with financial literacy training (FLT). Among these approaches, the cooperative linkage DECEMBER 2015 – MAY 2018 | $1,468,235 | MERCY CORPS PRIVATE FUND | NEPAL SUSTAINABLE ACCESS TO FINANCE AND LIVELIHOODS II (SAFAL II) mercycorps.org model and financial literacy initiatives have facilitated the most impact in remote rural areas. Strengthening the cooperative linkage model of microfinance and financial literacy initiatives initiated during SAFAL I, the program pursues the following activities as new initiatives under SAFAL II: Youth Financial Literacy Training (YFLT); introduction and expansion of livestock and crop insurance products; establishment of linkages between cooperatives and remittance agencies; establishment of good governance in cooperatives; digitization of cooperative accounting and diversification of financial products; and sharing of learning.

IMPACT

  • A total of 12,998 members (10,479 women and 2,519 men) received month-long FLT. Progress data from Savings and Credit Cooperative Organizations (SACCOs) shows there has been rapid growth in membership, savings amounts and loan disbursement and loan repayment after the implementation of FLT
  • SAFAL II is supporting 134 Cooperatives and five District Credit Unions through which a total of 67,618 members (24,508 men and 43,110 women) are accessing savings and credit services
  • In Mercy Corps-supported SACCOs, 63% of members are women, 49% of women members are on executive committees and 72% of members are from excluded communities (Dalits and Janajatis)

INFLUENCE

402 out of 1,462 local representatives chosen in June 2017 elections in program working areas were SAFAL II-supported cooperative members. As a result, local government bodies have allocated budget for SACCO development, and SACCO representatives’ voices are being heard.

A total of 55 Cooperatives have already received budget amounting to $59,790 this year.

Chameli Waiba facilitates FLT for villagers, helping them save money through financial education.

INNOVATION

Mercy Corps piloted YFLT in all five program districts. A total of 3,638 (1,422 boys and 2,216 girls) completed two-week-long YFLT. The initial impact of YFLT on participating youth has been observed in increased confidence, change in attitude and financial behavior and shared knowledge with family members. YFLT is also being replicated in Mercy Corps’ ERP and STEM II programs.