Further $15m for Nepal’s post-earthquake recovery

19 Oct 15

The Asian Development Bank (ADB) has approved a $15m grant to rebuild schools, provide small loans to help restore livelihoods and boost disaster awareness in those parts of Nepal worst hit by the earthquakes earlier this year.

This latest grant follows a $3m disaster-response grant approved by the ADB on 21 May as well as a $200m emergency loan approved on 24 June. Although managed by the ADB, it will be financed by a fund set up by the Japanese government in 2000 to support poverty reduction and social development in ADB projects.

An additional $1.3m will be provided by the Nepalese government and a further $1.5m by the Small Farmers Development Bank, a Nepalese umbrella microfinance bank.

Mayumi Ozaki, a financial sector specialist with ADB’s South Asia department, said: “Destroyed homes, farmland, businesses and lost livestock and harvests will push at least 700,000 additional Nepalese below the poverty line, many of them the hard-hit rural central hill and mountain areas where poverty was already high. We must help families get back on their feet as soon as possible and rebuild their lives.”

Around $8.1m of the overall funding will be used to rebuild at least 14 model disaster-resilient schools, $7m will provide microcredit to at least 12,500 households in affected districts and $1.9m will be dedicated to financing training to help people better understand how to prepare for and cope with disasters. The remaining funds will be used for contingencies.

The 7.8 magnitude earthquake that shook Nepal on 25 April and a subsequent major aftershock on 12 May affected the livelihoods of 2.3 million households and 5.6 million workers, resulting in personal income losses of around $170m in the fiscal year to 15 July 2015.

Most of these households have no access to the formal banking system and the microfinance institutions they rely on cannot meet the demand for credit from affected households due to their own limited funding.

 

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