Women-led and women-engaging enterprises (WLEs) play a vital role in Nepal’s agriculture and forestry sectors, sustaining rural livelihoods and strengthening community-level climate resilience. Nearly 70% of Nepali women are engaged in agriculture, acting as key stewards of forests, land, and ecosystems. Embedded across farming value chains as producers, workers, cooperative members, and suppliers, these enterprises have the potential to deliver widespread income and resilience benefits for local economies. However, despite their importance, WLEs continue to face systemic constraints, particularly in accessing appropriate finance and ecosystem support.
Nepal contributes minimally to global greenhouse gas emissions, yet it is among the countries most vulnerable to climate-induced disasters. Its economy and livelihoods are heavily dependent on climate-sensitive sectors such as agriculture, forestry, and natural resources. Enterprises operating in these sectors are increasingly exposed to climate shocks while lacking sufficient financial buffers and adaptive capacity, undermining their economic stability and long-term growth. The challenge is further compounded by a significant climate finance gap, estimated at USD 6.7 billion per year by 2035 under Nepal’s Nationally Determined Contribution (NDC 3.0), which limits investment in resilience, stable incomes, and sustainable development.
This policy brief examines the role of women-led enterprises in Nepal’s climate-vulnerable sectors and the barriers they face in accessing finance. It is based on a primary study led by the Climate Policy Initiative (CPI) in partnership with ForestAction-Nepal (FA-N) and the Southasia Institute of Advanced Studies (SIAS), complemented by insights from enterprises, financial institutions, and development partners. The field survey covered 200 WLEs across 40 of Nepal’s 77 districts, providing a detailed picture of ground-level realities.
The study finds that most WLEs struggle to scale due to limited market access and operational constraints. Over 70% of surveyed enterprises rely primarily on local markets and face high transportation costs, shortages of raw materials, weak bargaining power, low digital literacy, and limited institutional support. These challenges are more pronounced for women entrepreneurs, who often lack control over productive assets, access to markets, and decision-making power compared to men. Household care responsibilities and mobility restrictions further constrain women’s ability to grow their enterprises.
Climate risks intensify these existing structural and gender-based barriers. Although WLEs play a central role in local adaptation to climate change, they remain highly vulnerable to its impacts. Nearly two-thirds of surveyed enterprises reported being affected by climate shocks, yet only 37% of those felt adequately prepared to respond. While improved access to finance could help mitigate many of these challenges, it remains elusive for most women-led enterprises. Around 88% of respondents rely on personal savings, and only 56% have accessed formal finance. Key obstacles include lack of collateral, complex procedures, low awareness of financial products, and poor alignment between available credit and enterprise cash-flow needs. Emerging climate and impact finance opportunities also remain out of reach due to limited market readiness, weak business models, and inadequate impact measurement.
The study also highlights that the nature and intensity of challenges vary by enterprise size, underscoring the need for scale-specific interventions. Smaller enterprises, in particular, require structured technical assistance and ecosystem support to unlock capital and build resilience. While Nepal has a resilience-focused climate policy framework with commitments to gender equality and social inclusion, limited fiscal space and institutional capacity constrain effective implementation. Existing initiatives such as free business registration for women, subsidized lending schemes, and entrepreneurship facilitation centers are important steps, but they are not sufficient to address the depth of financial and structural barriers faced by WLEs.
To unlock climate finance for women-led enterprises, the brief recommends an integrated approach that aligns policy reform, enterprise support, and financial de-risking mechanisms. Strengthening the enabling environment through coordinated climate, gender, and enterprise policies, extending tailored capacity-building support, introducing risk-sharing financial instruments, and enabling aggregation through women-focused cooperatives can collectively enhance market power, improve access to finance, and build long-term climate resilience. By activating both public and private capacities, Nepal can better support women-led enterprises to realize their full potential in driving inclusive growth and climate action.
