Nepalese Women Entrepreneurs Face Barriers to Climate Finance Access

Women-led enterprises are pivotal to Nepal's climate-resilient livelihoods and local economies but face significant hurdles in securing both climate and commercial financing. To address these issues, Forest Action Nepal and the South Asia Institute of Advanced Studies, supported by the Climate Policy Initiative, organized a multi-stakeholder dialogue in Kathmandu. The event convened financial institutions, women entrepreneurs, researchers, and development partners to explore barriers and opportunities in financing women-led businesses.

Discussions revealed a disconnect between policy commitments to gender inclusion and climate action and the actual experiences of women entrepreneurs. Participants noted that women-led businesses are often perceived as welfare recipients rather than viable economic actors with growth potential, limiting the effectiveness of existing financial approaches.

The dialogue emphasized that access to finance alone is insufficient to unlock the full potential of women-led enterprises. A more integrated ecosystem is needed, combining finance with enterprise development support, market access, technology adoption, and climate risk management. Financial institutions acknowledged that women borrowers often demonstrate strong repayment behavior, but informality, limited collateral, and exposure to climate risks constrain lending at scale. Microfinance institutions were recognized as important entry points, though clearer pathways to commercial finance remain necessary.

The event also marked the launch of a new report providing ground-level insights into the barriers limiting climate finance for women-led enterprises, particularly in climate-sensitive sectors such as agriculture and forestry. Based on data from 200 enterprises across 40 districts, along with consultations with policymakers and financial institutions, the report finds that most women-led businesses depend on personal savings, lack assets for collateral, and operate informally, restricting access to formal finance.

The study identifies climate risks, social norms, and low financial literacy as compounding challenges, especially for micro- and home-based enterprises. To address these constraints, it outlines practical pathways including blended finance and risk-sharing mechanisms, aggregation and value-chain financing models, improved enterprise financial readiness, and better alignment of gender, climate, and financial sector policies.

Overall, the findings stress that supporting women-led enterprises is not merely a social objective but a strategic investment in Nepal’s inclusive and climate-resilient economic growth. The report calls for a shift toward coordinated, scalable frameworks that recognize women entrepreneurs as credible and investable actors central to achieving long-term climate and development outcomes.