ADBL: Supporting Agricultural Growth

The Agricultural Development Bank (ADB) was formally established in 1968, with the primary aim of supporting the development of rural and agricultural sectors, merging with the initial Cooperative Bank established in 1963. 

Bhumisudhar Bachat Sanstha was also merged with ADBL in 2030 BS. The bank was inaugurated by the late King Mahendra Bir Bikram Shah Dev at the present Nepal Bank Limited building in New Road, Kathmandu. This year, the bank successfully marks its 58th anniversary. 

Since its establishment, ADBL has been working in coordination with government bodies, international donors, and non-governmental organisations to promote the development of rural and agricultural sectors. It provides loans for agriculture, agro-based industries, industrialisation, and the commercialisation of agriculture, alongside offering accessible credit and comprehensive commercial banking services. 

ADBL operates as one of the largest banking networks in Nepal, with modern, computerised, and sustainable commercial banking services.

Ever since its establishment, the bank has simultaneously operated in three fields: commercial banking, development banking, and microfinance. The bank strives to connect all Nepali people with its financial literacy and inclusion programmes. 

In its early years, the government, the Asian Development Bank, GTZ, and other donor agencies were the primary sources of funding for the bank's programs. However, after realising that this external support alone would not effectively address rural needs, ADBL ventured into commercial banking in 1984. Initially, it focused on collecting deposits from a limited number of branches in major cities, with the objective of channelling urban deposits to rural areas and managing resources internally—a mission in which the bank succeeded. At that time, ADBL's computerised system stood out as a significant attraction compared to the traditional practices followed by other banks.

With the implementation of unified laws governing banks and financial institutions, ADBL was transformed into a public company on July 15, 2005, and began operating as a fully Class 'A' commercial bank on March 16, 2006. Subsequently, the bank issued 14.14 per cent of shares in 2008 to its existing clients (farmers), 30 per cent in 2010 to the general public, and 4.86 per cent in 2013 to its employees, implementing its capital plan. Currently, 51 per cent of ADBL's shares are owned by the government, while 49 per cent are owned by the public. ADBL is the only bank that issues shares to loan clients. ADBL continues to expand and strengthen its scope, fulfilling its mission of serving Nepal’s diverse financial needs and contributing significantly to the nation’s economic growth.

Rural outreach

Currently, ADBL is connected with the entire population of the country through a network of more than 284 offices spread across all 77 districts. All offices are linked through a highly advanced computerised system, ensuring the delivery of quality services. The bank offers a full range of banking services, including loans, gold loans, gold purchase and sale, foreign exchange purchase and sale, locker services, treasury transactions, trust receipt loans, guarantee transactions, and ATM services. SMS alert services, visa cards, mobile banking, e-bill remittance, and utility payments are also provided in a user-friendly manner, making them easily accessible at the rural level.

Payment services such as QR payments, mobile banking, internet banking, Fonepay, and other digital payment services are also available. 

The bank places a special emphasis on utilising information technology and marketing channels to deliver its services and products to everyone. 

The bank has also established extensive access in remote areas, particularly for women, indigenous communities, and low-income individuals, with regular financial literacy programmes and initiatives. These efforts align with the Financial Sector Development Strategy implemented by Nepal Rastra Bank, which focuses on improving financial access, literacy, and inclusion.

Achievements and challenges 

The contribution of Agricultural Development Bank to the country's economic and social development and financial sector has been highly significant. Overall, the bank has made important strides in poverty alleviation, small farmer development programmes, rural and agricultural sector growth. It has been providing microfinance services to marginalised communities, offering essential banking facilities to entrepreneurs, traders, and the general public across all regions and sectors, and ensuring its shareholders, including farmers, feel a sense of ownership by offering shares in the bank. 

Additionally, the bank has collaborated with the Asian Development Bank for capital and information technology development.

Some of the bank's major achievements in its 58-year journey include the smooth operation of government programs, offering modern banking facilities to the public, earning high profits, establishing itself as a leading commercial bank, and providing competitive returns to its shareholders.

Looking ahead, the bank aims to reduce the cost of capital, decrease overhead costs, maintain minimal operational expenses, further reduce non-performing loans (NPLs), hire new and qualified personnel from the market, and improve internal systems. The bank is working on increasing the reach of its products and services to the general public and customers, aiming to be a bank for all Nepali citizens. 

These efforts are in line with the bank’s commitment to continuously serving the public since its inception, contributing to the country's economy.

Throughout its service, the bank continues to improve its services by adapting to customer needs, available capital, technology, and managerial skills. It strives to achieve maximum benefits by enhancing the quality and effectiveness of its services.

Major contributions 

ADBL has contributed a lot to the development of the rural banking sector in Nepal, particularly in agricultural and rural development. It facilitated access to credit for people in the rural communities and helped develop the small farmers and small-scale agro-based industries. 

ADBL has been supporting irrigation development, alternative energy solutions, and giving loans and grants for different agriculture-related initiatives. The bank has also been involved in developing livestock farming, constructing cold storage facilities, and organising training programmes for farmers to enhance their skills and productivity. 

The priority to service over profit has been given by ADBL through focusing on rural areas so that even the most backward and underprivileged communities are covered with financial services. It has facilitated the formation of small farmer cooperatives, the use of modern agricultural practices, and the use of improved seeds and fertilizers. Apart from rural development initiatives, the bank is playing a positive role in national economic development. 

ADBL provides under one roof various services: transfer money, payment of remittances, savings mobilisation, and disbursement of payments for government activities. It has also been a pioneer in microfinance, more specifically through the Small Farmers Development Programme, which has empowered small farmers with credit, thus generating employment opportunities and enhancing their skill and knowledge. With its multifarious initiatives, ADBL has contributed toward the commercialisation of agriculture, increasing self-employment, and positively impacting communities throughout Nepal.

By optimising its resources and manpower, ADBL strives to become the "Bank at your Doorsteps" for the people, providing comprehensive banking services to all valued customers. The bank continues to receive support, inspiration, and encouragement from the public and stakeholders and is strengthening its technological infrastructure and operational efficiency for future growth.

(The author is a senior deputy general manager at ADBL.)