Community Irrigation Project (CIP)

The Community Irrigation Project (CIP) is a grant project of US$26.4 million from the Asian Development Bank (ADB), which was signed between the Government of Nepal (GON) and the Asian Development Bank (ADB) on February 8, 2011. The subsidiary agreement between GON and the Rural Microfinance Development Centre Ltd. (RMDC) was signed on April 19, 2011. RMDC is the implementing agency for Microfinance Training Component of Community Irrigation Project. The grant budget for this component is US$540,000. The objective of the Community Irrigation Project is to develop or improve small-scale irrigation systems in 12 districts in Nepal through a community-driven process targeted to the poor, women, and other disadvantaged groups.

Under the Community Irrigation Project the microfinance training component aims to facilitate access to micro-credit for agricultural inputs, irrigation equipment, and irrigation infrastructure operation and maintenance by enabling local microfinance organizations to offer savings and credit services to the project areas. The project component includes; (i) identification of new MFIs (Microfinance Institutions) in the project districts, (ii) capacity building and strengthening of potential MFIs, (iii) technical assistance to MFIs, (iv) provide training, organize interaction programs and exposure visits for MFIs.

Under the CIP project, RMDC has identified 127 potential cooperatives by the end of FY 2012/13. RMDC organized exposure visit to successful MFI for identified MFIs to enhance their knowledge about microfinance operation. In total 31 board members representing 11 MFIs participated in exposure visits. After the exposure visit, the participants are found very positive and they are willing to improve the governance and financial operation of their respective organizations. Furthermore, RMDC arranged four interaction programs for 55 MFIs under which 157 board members of MFIs did participate in the programs. During this period, RMDC has also conducted 4 interaction programs for water user farmers. The interaction program was attended by altogether 91 participants, including WUA members, representatives of CIP and MFIs. Major subject matters of the interaction program were saving products, loan products, cooperative membership, roles and responsibilities of WUA members etc. These interaction programs were found to be very fruitful for learning importance of savings and credit, cooperative management, role of cooperative in socio-economic activities, process of CIP operation etc. Upto the end of the FY 2012/13, altogether 16 MFIs have applied for the loan, among them one MFI has been able to get loan approved and appraisal procedure is on-going for remaining MFIs.

Monitoring of MFIs is one of the major functions of RMDC, so along with regular checks and verification, it is also a kind of training and on-site consultancy to MFIs under CIP project. RMDC monitors MFIs through on-site visit to MFIs office and beneficiaries where operation and activities are checked and confirmed they are performing as per the prescribed norms. Under off-site monitoring RMDC regularly obtain progress reports from MFIs which are compiled and analyzed regularly to assess the progress achieved by each of the MFI. Progress of Community Irrigation project looks satisfactory in terms of both quantity and quality of achievement.