This brief explores the role of WLEs in Nepal’s agriculture and forestry sectors and the barriers they face in accessing finance. It is based on a primary study led by Climate Policy Initiative (CPI) with ForestAction-Nepal (FA-N) and the Southasia Institute of Advanced Studies (SIAS), and insights from enterprises, financial institutions, and development partners.

Nepal is highly vulnerable to climate shocks, even though it contributes minimally to global emissions. Agriculture and forestry enterprises are increasingly exposed to risks and often lack the buffers and adaptive capacity to respond.

Climate finance remains insufficient. Nepal’s climate financing gap is estimated at USD 6.7 billion per year by 2035 (NDC 3.0), limiting investment in resilience, stable incomes, and sustainable growth.

KEY FINDINGS

Our field survey of 200 WLEs across 40 of Nepal’s 77 districts yielded the following insights.

• Market access and operational constraints limit enterprise scalability. Over 70% of WLEs depend on local markets and face high transport costs, raw material shortages, weak bargaining power, low digital literacy, and limited institutional support.
• Female entrepreneurs experience these challenges more acutely. Women often lack control over productive assets, market access, and decision-making relative to men. Disproportionate household care burdens and mobility restrictions also compound constraints on women’s enterprise growth.
• Climate risk compounds existing structural and gender constraints. Despite their central role in local adaptation to climate change, WLEs remain highly vulnerable—65% reported being affected by climate shocks and only 37% of this group felt adequately prepared.
• Access to finance could mitigate the above challenges, but this remains particularly elusive for WLEs. Most surveyed (88%) rely on personal savings, and only 56% have accessed formal finance due to collateral gaps, procedural complexity, low awareness, and misaligned financial products. Emerging climate and impact finance opportunities remain out of reach for most WLEs, due to their limited market readiness, weak business models, and inadequate impact measurement.
• The nature and intensity of challenges faced by WLEs vary by enterprise size, underscoring the need for scale-specific interventions, including structured technical and ecosystem support to unlocking capital.

KEY RECOMMENDATIONS

Nepal can activate both public and private capacities to strengthen WLEs through an integrated approach that aligns policy, enterprise support, and de-risking of financial instruments.

Action	Details
Strengthen the enabling environment	Establish a climate, gender, and enterprise policy working group to develop a comprehensive framework with earmarked budgets and robust performance tracking, building on existing National and Local Adaptation Plans to ensure focus on gender as a core issue in climate adaptation. This action may be led by relevant government departments with consultations and inputs from local participants in the women’s business ecosystem.
Extend tailored capacity-building support based on enterprise need	Deliver program-based assistance for enterprise formalization, financial and market literacy, adoption of climate-smart practices, and market access. Provide targeted investor-readiness support to high-potential enterprises. This exercise may be jointly undertaken through partnerships among relevant line ministries, international development agencies, philanthropic organizations, and NGOs.

Action	Details
De-risk lending to WLEs	Introduce supportive frameworks to enable parametric insurance-linked credit and other risk-sharing instruments to attract lenders and expand credit to climate-exposed enterprises. National banking and insurance regulators are best positioned to develop a framework for enabling innovation for de-risking investments at the intersection of climate and gender, with implementation support from banks, MFIs, and insurance underwriters.
Enable aggregation and market power	Support women-focused cooperatives and enterprise associations to improve bargaining power, reduce transaction costs, and strengthen access to finance and markets. Such efforts can be anchored within public institutions and local delivery systems, supported by cooperative networks and civil society actors with expertise in women’s economic empowerment.

Download the technical brief