Terms of Reference for Unlocking Finance for Chitwan’s Dairy Sector: A Credit Flow and Investment Landscape Study

Terms of Reference for Unlocking Finance for Chitwan’s Dairy Sector: A

Credit Flow and Investment Landscape Study

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.

Through its signature programs — SLVC, VITA, and Milky Way — Heifer drives inclusive growth by partnering with the governments, fostering private sector partnerships, and positioning cooperatives as engines of agricultural transformation.

Under the Milky Way program, in partnership with the governments of Nepal and South Korea, Heifer aims to double national milk production and reduce imports by 50% by 2030, improving cattle genetics and building an efficient, integrated dairy value chain to benefit over 500,000 smallholder farmers.

However, despite Chitwan surpassing Kavre as Nepal’s top milk-producing district, farmers struggle with delayed payments and market imbalances that threaten livelihoods and supply chains.

To tackle this, Heifer has partnered with the District Milk Producers Cooperative Union (DMPCU), Chitwan. Bridge the investment or financing gaps in the sector is one of the areas of partnership. Yet, barriers remain unclear and unstable policies and insufficient government support limit cooperatives’ access to credit at the scale needed.

To unlock Chitwan’s dairy potential, Heifer together with DMPCU plans a comprehensive study of the dairy sector’s investment and credit landscape in the Chitwan district. The findings will shape an innovative financing solution and targeted interventions to strengthen both supply and market linkages — ensuring timely payments, affordable finance, and a thriving, resilient dairy sector.

2. OBJECTIVES

The objective of this study is to understand the landscape of credit or investment in the dairy sector or cooperatives of Chitwan district.

• Map the Current Credit Flow and Financing Gaps in the Dairy Value Chain Actor’s Level: Assess the existing financial landscape, including sources of credit, loan terms, repayment status, practices, and unmet financing needs of dairy cooperatives and smallholder farmers in Chitwan.
• Identify Barriers and Enablers for Accessing Affordable Finance: Analyze policy, regulatory, institutional, and market factors that limit or enable dairy cooperatives and farmers’ access to adequate, timely, and affordable credit.
• Recommend Innovative Financing Solutions and Program Interventions: Suggest designing practical financial products and investment sourcing mechanisms that bridge the identified gaps, strengthening the dairy value chain’s supply and market sides for greater productivity and income security.

3. SCOPE OF WORK

The study will map the existing credit flow and financing mechanisms within Chitwan’s dairy sector, covering smallholder farmers, cooperatives, and value chain actors. It will identify key barriers and opportunities related to policies, institutions, and market linkages that affect access to affordable finance. The study will also analyze existing financial products and assess their suitability for dairy cooperatives and farmers. Based on these insights, it will recommend practical, innovative financing solutions and program interventions to strengthen credit access, ensure timely payments to farmers, and enhance the overall efficiency and resilience of the dairy value chain in Chitwan.

4. METHODOLOGY AND AREA OF STUDY

• Policy and Literature Review: Review existing policies, strategies, data, reports, and frameworks relevant to dairy cooperatives in Chitwan.
• Stakeholder Consultations: Conduct interviews, focus group discussions, and surveys with dairy cooperatives, Banks and Financial Institutions (BFIs), government agencies, private sector actors, and farmer organizations as needed.
• Financial and Business Analysis:
  • Assess cooperatives’ financial records, audit reports, credit history, and relationships with financial institutions.
  • Analyze cooperatives’ core business operations, revenue streams, profitability, pricing, cost structure, and operational bottlenecks.
  • Estimate each cooperative’s capacity to absorb and utilize external funding.
• Investment Chain and Credit Flow Mapping:
  • Map credit and investment flows within and across cooperatives.
  • Identify key financial service providers, instruments (grants, loans, equity, revolving funds), and analyze existing mechanisms for gaps and opportunities.
• Payment Terms and Cash Flow Analysis:
  • Review payment terms and practices, assess reliability and timeliness, and analyze impacts on working capital and cash flow across cooperatives.
• Existing Financial Service or Investment Providers and Impact:
  • Document current BFIs and investors, including government subsidies, financial institutions, development partners, and cooperative federations.
  • Analyze the volume, utilization, and impact of current investments.
• Key Value Chain and Financing Landscape Assessment:
  • Map available financial products and services, including credit flows, interest rates, loan terms, guarantees, insurance, and digital solutions.
  • Assess demand- and supply-side constraints.
• Recommendations and Product and Interventions Design:
  • Propose practical financing solutions (e.g., working capital, supplier credit, contract farming).
  • Provide a clear roadmap for pilot testing, scale-up, and sustainability of financing interventions in Chitwan’s dairy sector.

5. EXPECTED DELIVERABLES

The consultant/team will deliver the following:

• Inception Report: Methodology, workplan, stakeholder list and data collection tools.
• Draft Landscape Report: Preliminary findings and initial recommendations.
• Major Findings Sharing and Validation Workshop: Present draft findings to key stakeholders and integrate feedback.
• Cooperatives financial profiles (one pager)
• Final Report: Comprehensive landscape assessment, best practice case studies, financing gap analysis and program design recommendations.
• Presentation Deck: Summary slides for dissemination and advocacy.

6. QUALIFICATION AND REQUIREMENT 

• Master’s degree in business management, finance, agriculture economics or relevant field.
• Proven experience (seven 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. DURATION OF ASSIGNMENT

The assignment is expected to take 30 days from the date of signing the contract.

8. REPORTING AND SUPERVISION

The team/consultant 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.

9. HOW TO APPLY

Qualified individuals, teams or firms are invited to submit the application to Procurement-NP@heifer.org with title “Unlocking Finance for Chitwan’s Dairy Sector: A Credit Flow and Investment Landscape Study” by no later than August 4, 2025, 5: 00 PM.

DOCUMENTS REQUIRED 

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 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.