The International Finance Corporation (IFC), a member of the World Bank Group, is proposing an investment of up to $20 million in Kathmandu-headquartered Sanima Bank, Nepal’s 15th largest bank in terms of total assets.
The proposed investment, which is a 3-year USD denominated senior loan, will be used to finance SMEs in Nepal and broaden the bank’s reach outside Kathmandu, IFC said in a disclosure.
“By improving access to finance for SMEs, the investment with Sanima is expected to create more jobs in the economy….increase the attractiveness of SME financing (including rural SME financing) for the banking sector and mobilize more domestic and international investment in this area,” the lender said.
Listed on the Nepal Stock Exchange, Sanima is one of the youngest commercial banks in Nepal. The promoter group owns 51% of the banks shareholding and consists of 71 individuals and 2 companies. The remaining 49% shares are held by the public. Out of the total promoter group, 11 shareholders own more than 1% share.
Last year, IFC provided a loan up to $10 million to NIC Asia Bank, the third-largest private sector commercial bank in Nepal in terms of asset size.
The proposed financing will help NIC Asia Bank support the working capital needs of its clients, especially small and medium enterprises (SMEs) in key sectors within Nepal’s economy.
In Kathmandu, IFC was also considering to dole out a $10-million senior loan to Nepal’s wholesale lending organisation RMDC Laghubitta Bittiya Sanstha, formerly known as the Rural Microfinance Development Centre.
Earlier, the global lender had proposed to invest up to $10 million in Nirdhan Utthan Laghubitta Bittiya Sanstha Limited, a Kathmandu-based retail microfinance institution.