July 1: The International Finance Corporation (IFC), the private sector arm of the World Bank, has said it will be investing additional USD 60 million in Nepal in the next six months. IFC shared its investment plans on Tuesday amid a memorandum of understanding (MoU) signing ceremony with NMB Bank to provide the bank USD 25 million loan.
According to Santosh Pandey, acting resident representative of IFC for Nepal, the corporation will invest in two commercial banks and two microfinance institutions. He said that IFC will make loan investment of around USD 50-60 million in FY 2020/21 in Nepal. “We will be investing only in small and medium industries (SMEs),” said Pandey in a press meet organised virtually after the MoU signing function.
“Now, we will provide loans to the enterprises which are already in our funding pipeline,” he added. According to him, 90 percent of industries in Nepal are small, medium and cottage industries. “Investment in such enterprises will help in employment creation, support export and contribute in country’s GDP.
Loan Agreement with NMB
NMB bank will be receiving USD 25 million IFC as foreign loan. Sunil KC, CEO of NMB Bank and Santos Pandey of IFC signed an agreement to this effect. Speaking on the occasion, KC informed that the loan will be invested in SEM sector which has been severely affected by the Covid-19 pandemic. Recalling the USD 15 million NMB Bank borrowed from IFC two years ago, KC commented that the bank will focus its investment to support the growth of SME sector. “IFC has provided the amount as term loan for three years. We will receive the money after getting approval from Nepal Rastra Bank (NRB),” KC said adding that NRB has simplified the process of bringing money from abroad.
Besides IFC, NMB has already received loan of Rs 1 billion each from Symbiotics Investment, Switzerland and Commonwealth Development Cooperation.