Siddhartha Bank and IFC Sign $40 Million Risk-Sharing Facility for MSMEs

Kathmandu. Siddhartha Bank and the International Finance Corporation (IFC) have signed an agreement for a $40 million risk-sharing facility to increase financing for micro, small, and medium enterprises (MSMEs) in Nepal, create jobs, and promote inclusive economic growth.

Siddhartha Bank and IFC, a member of the World Bank Group, signed the agreement for a $40 million risk-sharing facility under IFC's Small Loan Guarantee Program (SLGP). By sharing 50 percent of the risk on eligible MSME loans provided by Siddhartha Bank, IFC will strengthen the bank's capacity to lend to MSMEs across Nepal.

This arrangement is part of IFC's first risk-sharing initiative in Nepal. It is supported by a joint guarantee from the IDA Private Sector Window blended finance facility.

According to Siddhartha Bank's Chief Executive Officer Rameshwar Prasad Basyal, the $40 million partnership with IFC under this risk-sharing facility is a significant step toward expanding the bank's MSME portfolio.

"Especially at a time when we are facing a challenging economic environment, this will strengthen our ability to finance many small businesses across the country," he said. "While maintaining our prudent lending standards, we aim to encourage entrepreneurs, create jobs, and contribute to Nepal's inclusive growth by increasing lending in this important sector."

This agreement further strengthens the long-standing relationship between Siddhartha Bank and IFC. In 2014, SBL joined IFC's Global Trade Finance Program, which connected the bank's trade clients to a worldwide network of partner banks.

In 2023, Siddhartha Bank secured a $55 million joint loan facility from IFC, which was the first joint loan in foreign currency for Nepal's financial sector.

Siddhartha Bank has also partnered with IFC through advisory services to build institutional capacity in risk management, gender finance, digital finance, and climate finance.