New 3 year financing will provide credit to businesses in Nepal’s growing economy
CDC, the UK’s development finance institution, has today announced its first direct investment in Nepal, a US$15 million, three-year loan to NMB Bank (“NMB”), one of the country’s leading commercial banks.
CDC’s investment in NMB will allow the bank to grow its lending to key sectors of the Nepalese economy, including infrastructure, agriculture and foreign currency-earning sectors such as tourism and hydropower projects.
This is only the second debt investment in the Nepalese banking sector since regulatory reforms were introduced in 2018. Previously, Nepalese banks had been constrained in raising capital from foreign investors due to restrictions on borrowing in foreign currency.
NMB has 15,000 business accounts (and 110 branches) across Nepal and currently serves a range of large and medium-sized business customers. NMB aims to focus on growing the proportion of loans to micro, small & medium-sized businesses (MSMEs) in the coming years.
NMB has been recognised as ‘Bank of the Year in Nepal’ for two consecutive years, 2017 and 2018, by The Banker, a Financial Times publication, for its leading role in the country’s financial sector by using new digital technology and establishing a program to improve women’s access to financial services. NMB is the only member bank from Nepal in the Global Alliance for Banking on Values, an independent worldwide network of banks whose objective is to use finance to deliver sustainable economic, social and environmental development.
Speaking at a press conference in Kathmandu to announce the investment, Holger Rothenbusch, CDC’s Managing Director Debt and Infrastructure, said:
“In making our first direct investment in Nepal, CDC is continuing a long tradition of pioneering investments that have the potential to bring about major economic development. NMB is a key part of Nepal’s financial sector and our investment will allow it to provide increased long-term support to the businesses that contribute to Nepal’s growth.”
Sunil KC, CEO, NMB Nepal said:
“The Bank is proud to partner with CDC and bring in their first ever investment in the country. The investment reaffirms NMB’s strong financial standpoint wherein it has been able to foster alliances with international financial organizations to usher in foreign direct investment during a tight liquidity situation facing Nepal.”
Rurik Marsden, the UK’s Department for International Development Head of Office in Nepal, said:
“The UK is a long-term development partner to Nepal. Our support to date has contributed to Nepal’s sustainable economic development through increased private investment in large scale infrastructure, better local infrastructure and improved access to finance. CDC’s investment in Nepal comes at an important time as the country transitions into a decentralised state and should help increase investors’ confidence in coming to Nepal.”
CDC has been an investor in Asia for 70 years and continues to invest in job-creating, transformative sectors such as infrastructure, construction, business services, and manufacturing in countries including India, Bangladesh, Pakistan and Myanmar. Today’s investment in Nepal further expands CDC’s network across the region. In late 2018, CDC announced its aim to invest US$1.7 billion in South Asia over the next three years and set out its commitment to partnering with local businesses to help boost growth, job creation and increased investment.
Rhyddid Carter: [email protected]; +44 (0)7824 552326