Kathmandu. Siddhartha Bank and International Finance Corporation (IFC) have signed a memorandum of understanding for a $40 million risk-sharing facility under the Small Credit Guarantee Program to enhance financing, create jobs and promote inclusive economic growth for micro, small and medium enterprises (MSMEs) in Nepal.
Siddhartha Bank and IFC, a member of the World Bank Group, have signed an agreement for a $40 million risk-sharing facility under IFC’s Small Credit Guarantee Program (SLGP). By sharing 50 per cent of the risk on eligible MSME loans provided by Siddhartha Bank, IFC strengthens Siddhartha Bank’s ability to lend to micro, small and medium enterprises (MSMEs) across Nepal.
This arrangement is part of IFC’s first risk-sharing initiative in Nepal. This is supported by a joint guarantee of the IDS Private Sector Window Blended Finance Facility.
According to Rameshwar Prasad Basyal, Chief Executive Officer of Siddhartha Bank, the $40 million partnership with IFC in this risk-sharing facility is a significant step towards expanding the bank’s MSME portfolio. “This strengthens our ability to finance many small businesses across the country, especially at a time when we are facing a challenging economic environment,” he said. ’
This agreement further strengthens the long-standing relationship between Siddhartha Bank and IFC. In 2014, SBL joined IFC’s Global Trade Finance Program. This connected the bank’s business customers to a global network of peer banks.
In 2023, Siddhartha Bank secured a joint loan facility of $55 million from IFC. This is 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.
