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Good practice Imported

REED Project — Nepal's World Bank-Backed Mentoring and Market-Linkage Programme for Rural Agri-SMEs

Nepal · Pokhara · See the Nepal profile

Evidence: Descriptive / self-reported Top 85% 52/100 · Ask Evidence Copilot about this practice

Nepal's $80m World Bank-financed REED project pairs rural agri-SMEs with mentors for business diagnostics and coaching; two Pokhara firms tracked by the Bank roughly doubled sales and output within a year of enrolling.

80 USD million
REED project financing (World Bank IDA)
102
SMEs and startups completing business diagnostics and training (by early 2025)
25
Firms selected into the pilot incubation cohort (by early 2025)
350 kg to 600 kg
Poshilo Foods daily sales volume growth
1 to 5
Poshilo Foods institutional buyer base growth
Rs 20 million (2024) to Rs 40 million run-rate (March 2025)
Harilo Agro Industries revenue growth
23
Harilo Agro Industries employees
REED Project — Nepal's World Bank-Backed Mentoring and Market-Linkage Programme for Rural Agri-SMEs

Details

Maturity
Pilot
Promoter
Ministry of Agriculture and Livestock Development, Government of Nepal, with World Bank (IDA) financing
Period
2021–ongoing
Keywords
agri-processing, rural enterprise, SME productivity, market linkages

Context

The Rural Enterprise and Economic Development (REED) Project is an $80 million project financed by the World Bank and implemented by Nepal's Ministry of Agriculture and Livestock Development, running since 2021 across six provinces via four Economic Corridor Offices.

Objectives

REED pairs rural agri-SMEs with mentors — each working with four to six firms — who deliver business diagnostics, incubation action plans and coaching aimed at connecting producers to buyers and raw-material suppliers.

Activities

By early 2025, 102 SMEs and startups had gone through business diagnostics and training, with 25 firms selected into a pilot incubation cohort.

Results

Two tracked Pokhara-based food processors illustrate the range of results: Poshilo Foods grew daily sales volume from 350 kg to 600 kg and its institutional buyer base from one to five, while Harilo Agro Industries, which started with a Rs 50 million investment, saw revenue roughly double from Rs 20 million in 2024 to a Rs 40 million run-rate by March 2025, growing to 23 employees.

Conclusions

The World Bank's own reporting is candid that Nepal's SME ecosystem still lacks systematic data on enterprise survival rates and formal-to-informal transitions, so these results are drawn from a small set of tracked firms rather than a full programme evaluation.

Implementation
Indicative cost
High (€500k–€5M) — $80 million World Bank (IDA) financing for the overall REED project across six provinces.
Time to results
Long (> 3 years) — Running since 2021, ongoing as of 2025 reporting; a fixed World Bank credit window with no confirmed continuation mechanism after closure.
Staffing & skills
Mentors, each assigned four to six rural agri-SME firms, Four Economic Corridor Offices across six provinces, Ministry of Agriculture and Livestock Development implementation staff

Conditions for success

  • Business diagnostics and incubation action plans tailored per firm
  • Direct market-linkage brokering connecting producers to institutional buyers and raw-material suppliers
  • Multi-year World Bank (IDA) financing providing a funding runway

Common failure modes

  • World Bank reporting notes Nepal's SME ecosystem lacks systematic data on enterprise survival rates and formal-to-informal transitions, limiting the ability to detect underperformance
  • Reach remains a small fraction (102 SMEs) of the national SME population

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