Terms of Reference for Study on Agriculture Value Chain Financing Landscape in Nepal: Developing an Innovative Financing Program for Food System Transformation

Terms of Reference for Study on Agriculture Value Chain Financing Landscape in Nepal:

Developing an Innovative Financing Program for Food System Transformation

1. Background

Heifer International Nepal is dedicated to ending hunger and poverty while caring for the Earth. Since its inception in 1957, Heifer has impacted the lives of over 400,000 families through agriculture and livestock programs, focusing on empowering rural women. By creating Self-help Groups and Social Entrepreneur Women’s Cooperatives (SEWCs), Heifer helps build resilient communities and sustainable livelihoods. With a holistic approach, Heifer collaborates with local governments and partners, engages youth to improve agricultural practices, supports women-led cooperatives, and creates lasting economic change. Its mission is to ensure families achieve sustainable living incomes, with access to food, shelter, education, and healthcare, while driving progress toward more inclusive and resilient agri-food systems.

Despite agriculture contributing about one-third of Nepal’s GDP and employing over two-thirds of its workforce, smallholder farmers still struggle to access affordable finance for productivity, climate-smart practices, value addition, and market linkages. Existing credit options often fail to meet their needs due to lack of quality collateral, limited availability or stringent conditions, increasing production costs and reducing competitiveness. 

Heifer has emerged as a leading development agency in mobilizing investments, forging strategic partnerships, and advancing sustainable agriculture through its signature programs—VITA, SLVC, and Milky Way. These programs share strong synergies in operations, local government collaboration, and private sector engagement, positioning them for greater impact. To build on this, Heifer plans to strategically structure a value chain financing program that strengthens its signature initiatives while securing investments to accelerate their objectives, aligning with Nepal’s ten-year campaign to boost agricultural investment and its goal of graduating to a middle-income country by 2026.

Aligned with Nepal’s Integrated National Financing Framework (INFF) Financing Strategy 2025–2030, which places productive employment and climate resilience at the core of its post-LDC graduation plan, this new program will channel public and private resources through six reinforcing pillars. By prioritizing private sector engagement and investment facilitation, Heifer aims to redefine its programs with clear pathways for access to innovative finance, value chain financing, impact investment, and blended finance in Nepal. Over the past five years, Heifer Nepal has made notable progress in addressing these gaps, partnering with 14 local banking and financial institutions (BFIs) and securing commitments of USD 76.5 million for target commodities. So far, USD 20 million has been mobilized, benefiting 12,000 farmers, SMEs, and 154 cooperatives. 

In parallel, 280 cooperatives have independently mobilized over USD 100 million within their communities, further highlighting both unmet financing needs and growth opportunities.

Building on this, Heifer’s Social Entrepreneurs Women Cooperatives (SEWCs) are strengthening rural financial access through the Bank Sathi network, bridging gaps between investors and farm businesses and empowering rural women. By actively involving BFIs, impact investors, and SEWCs, Heifer aims to drive inclusive growth and resilience in the agriculture sector.

While various instruments—such as cooperative loans, government subsidies, and donor-backed guarantees—exist, a significant financing gap persists. New solutions like blended finance, value chain financing, and digital services offer practical ways to bridge this gap and build a resilient, sustainable food system.

Against this backdrop, Heifer Nepal plans a comprehensive landscape assessment to design an innovative financing program. This will help develop an ecosystem that expands access to tailored financial services for smallholder farmers, cooperatives, producer organizations, agri-SMEs, and value chain actors across Nepal.

2. Objectives 

The main objective is to analyze the current agriculture value chain financing landscape in Nepal and provide actionable recommendations to design a program that: a) Strengthens innovative financing solutions to mobilize blended finance (including impact investment and commercial or private capital) for the underserved agriculture sector b) Enhances resilience and income opportunities for smallholder farmers and agri-entrepreneurs c) Supports the development of a sustainable and inclusive food system transformation. Specific objectives are;

• Map existing financial institutions, instruments, and schemes providing finance along the agriculture value chains and identify financing gaps and barriers faced by demand side (smallholder farmers, cooperatives, traders, input suppliers, technicians, and agri-SMEs) and supply side (BFIs and other Investors).
• Analyze current policy and regulatory gaps/challenges and opportunities in agriculture value chain financing, identify solutions for catalyzing systemic change.
• Analyze successful national and international best practices/models in agriculture value chain financing.
• Explore opportunities for innovative financing, blended finance through different vehicles, i.e. credit, guarantees, impact investing, digital finance, trade and supply chain finance.
• Recommend feasible program design options, including potential partners, products, delivery mechanisms, and an implementation roadmap.

3. Scope of Work

The consultant/team will:

• Desk Review: Review relevant policies, strategies, and regulatory frameworks on agriculture and rural finance in Nepal.
• Analyze existing studies, data, and reports related to value chain financing.
• Stakeholder Mapping & Engagement:
• Identify and consult key stakeholders including government agencies (MoALD, NRB, MoF), BFIs, cooperatives, MFIs, DCGF, insurance providers, development partners, fund managers, ag-tec/fin-tec providers, farmer organizations, private sector actors, and associations/forums.
• Conduct key interviews and FGDs where necessary.

Value Chain Analysis (Dairy, Goat, Vegetables, Spices, Fish, etc.):

• Identify key agricultural value chains (e.g., dairy, vegetables, grains, spices, livestock, etc.) with high potential for scaling financing solutions.
• Assess financing needs and current access along the nodes of these value chains—production, aggregation, processing, marketing, export.

Financing Landscape Assessment:

• Map financial products, services, credit flows, interest rates, loan terms, guarantee schemes, insurance products, and digital solutions available to value chain actors.
• Identify constraints on both demand (farmer/SME level) and supply (financial institution level).

Innovative Financing Options:

• Analyze feasibility of introducing or scaling innovative instruments, including blended finance structures, risk-sharing facilities, supplier credit, contract farming finance, warehouse receipt systems, digital lending, and green/climate finance.

Recommendations & Program Design:

• Propose a practical framework for an innovative financing program, including potential structures, partners, funding sources, risk mitigation measures, and expected impacts.
• Provide a clear roadmap for pilot implementation, scale-up, and sustainability.

4. Deliverables

The consultant/team will deliver the following:

• Inception Report: Methodology, work plan, stakeholder list, and data collection tools.
• Draft Landscape Report: Preliminary findings and initial recommendations.
• Major Findings Sharing and Validation Workshop: Present draft findings to Heifer Team and key stakeholders and integrate feedback.
• Final Report: Comprehensive landscape assessment, best practice case studies, financing gap analysis, and program design recommendations.
• Presentation of Pitch Deck: Summary slides for dissemination and advocacy.
• Photographs taken during the assignment.

5. Duration

The assignment is expected to take 9 weeks from the date of signing the contract.

6. Required Qualification and Expertise

• Master’s degree in business management, finance, agriculture or relevant field.
• Proven experience (ten years or more) and expertise in agriculture financing.
• Strong understanding of financial inclusion, value chain financing, blended finance, and impact investing in developing countries.
• Experience working with smallholder farmers, cooperatives, and agri-SMEs in Nepal or similar contexts.
• Demonstrated capacity for stakeholder engagement and participatory research.
• Excellent analytical, writing, and presentation skills.

7. Reporting & Supervision

The consultant/team will work under the direct supervision of Access to Finance Lead and coordinate closely with designated focal points. Regular progress updates will be provided as agreed.

8. Application Process

Qualified individuals, teams, or consultancy firms are invited to submit the application to

Procurement-NP@heifer.org  with the title “Study of Agriculture Value Chain Financing Landscape in Nepal: Scoping for Developing an Innovative Financing Program for a Sustainable and Resilient Food System” by no later than August 4, 2025, 5 : 00 PM along with the following documents.

1. Cover Letter
2. A technical proposal outlining understanding of the ToR, methodology, work plan, and team composition.
3. Financial proposal.
4. CVs of key personnel.
5. Relevant work samples (two recent documents or reports), or references.
6. Registration certificate
7. Tax clearance certificate (FY 080-81)

Note: VAT registered individual consultants are encouraged to apply.

Heifer reserves the right to accept or reject any proposal and to annul the selection process and reject all Proposals at any time prior to contract award, without thereby incurring any liability to affected individuals.