Our investment
Description of the investment.
Description of the investment.
BII invested a $25m senior unsecured directed debt line to Laxmi Sunrise Bank, a leading bank in Nepal, to on-lend to MSMEs and women-led MSMEs (WMSMEs). This provides an opportunity to address the critical financing gap in the MSME and women led businesses in the country through an aligned local partner.
Impact information
Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.
Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.
What?
| Impact |
|---|
Improved access to economic opportunities by providing access to credit for SMEs, particularly women (SDG 8.10, 9.3, 5a) |
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How?
| Primary | Secondary |
|---|---|
|
Economic Enabler: our loan will support Lotus in expanding its MSME lending, with a focus on women entrepreneurs (WSMEs). |
Increased access to credit is expected to improve their economic opportunities. |
Who?
| Stakeholder | Geography | Characteristics |
|---|---|---|
| Owners and employees (of MSMEs) |
Nepal |
Our funds will support SME loans < NPR 50m, with 30% directed to WSMEs. Most loans are expected to go to Wholesale & Retail sector, followed by Agriculture and Related activities. In Nepal, about 94% of registered entities are small and medium enterprises. MSMEs contribute 22% to the GDP and employ 1.8 million people, especially women. Only 17% of MSMEs have access to financing through formal channels due to limited geographic reach. |
How much?
| Scale | Depth/Duration |
|---|---|
|
The bank's SBL book is expected to grow by NPR ~3.5bn (USD 25m) over the 18-month deployment period. The average ticket size is expected to be NPR ~2.7m with a reach of ~1300 MSMEs. Loans to WMSEs are expected to grow by NPR 1bn (USD 7.5m) over the same period. |
Duration: at least the SME loan tenor (avg. 5 years), benefits are expected to be realised even beyond that. Depth: Variable depending on the characteristics of the stakeholders. New to formal credit and underserved segments (e.g., women) are expected to have higher depth. |
Contribution/additionality
| Contribution/additionality |
|---|
|
Our directed lending Facility will enable the bank to grow its MSME loan book – which has seen a decline due to credit quality issues and slow MSME demand – by ensuring availability of funds as the credit market recovers. |
Risk
Execution RiskThere is risk that the bank’s MSME loan book does not grow due to credit surplus in the market, weak MSME demand, and the bank’s post-merger consolidation focus. However, the surplus is expected to be short-lived, with MSME credit demand likely to rise. To mitigate risk, BII is using a directed line with an aligned partner committed to SME growth, extending the deployment period, with a pre-payment clause if funds are not on-lent as intended. Invest for Impact Nepal's (IIN) gender-financing advisory will support the bank’s WSME lending. Unexpected Impact RiskRisks of limited credit underwriting and collection practices, leading to customer protection risks. Although NPLs for this segment are high, we take some comfort that these are not low-income customers who would be vulnerable to falling into poverty. The ‘naming and shaming’ practice is addressed in the ESAP/legals. |
Impact score
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Impact score (at point of investment)
The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. The Impact Score shown is based on the 2022-2026 Impact Score methodology. You can find out more here. The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party. |
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5 |
Environmental and social information
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Environmental and social summary
A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.
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Environmental and social risk
A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.
Environmental and social summary
BII as part of its E&S action plan has agreed to develop a proportionate E&S management system and upskilling E&S competencies of relevant personnel for effective implementation of ESMS.
Environmental and social risk
Medium-High
Reporting and Complaints Mechanism
The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.
For any other general enquiries contact us at [email protected]
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Key facts
- Last updated
:
When the last quarterly update of the website database occurred.
- June 2026
- Project number
:
An identifier number shared by investments in the same project.
- D6588
- Status
:
The current status of the investment (green flag for active and red flag for exited).
- Active
- Region
:
The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.
- South Asia
- Country
:
The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.
- Nepal
- Sector
:
We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.
- Financial services
- Sub sector
:
The sub-sector that the investment is made into; this provides a more granular level of detail than the ‘sector’ information
- Banks
- Investment policy :
- Growth
- Investment type :
- Debt
- Start date :
- November 2025
- Amount :
- $25m
- Currency of investment :
- USD
- Domicile
:
The company or investment fund’s place of incorporation.
- Nepal
We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.
Type of investment portfolio that each investment is made under. Since 2014, we have run two investment portfolios: Catalyst and Growth. In addition, our Kinetic Portfolio enables us to manage concessional investment strategies.
For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.
For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.
For direct equity investments, this is the date at which British International Investment exited the investment.
For debt investments, this is the date at which the final debt repayment was made.
For funds, this is the date at which the fund was terminated.
For underlying fund investments, this is the date at which the fund manager exited the investment.
The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.
For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.
The currency in which the investment was made.
- Last updated
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Gender and climate finance facts
- 2X gender finance
:
Indicates whether the investment is ‘2X qualified’ using the 2X Challenge criteria. You can find out more here. It only applies to investments made from 2018 onwards, when the 2X Challenge was first launched.
- Fully qualified
- 2X qualification criteria:
:
2X Criteria the investment qualifies under. See 2X Criteria for more information.
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- Leadership — Board of Directors/Investment Committee
2X threshold 30%: Investee already meets threshold - Indirect/Portfolio
2X threshold 30%: Investee already meets threshold - Governance and Accountability
- Leadership — Board of Directors/Investment Committee
- 2X sector
:
Indicates the specific 2X sector benchmark the investment qualifies under. See 2X Criteria for more information.
- Financial and Insurance Activities
- 2X country
:
Indicates the specific 2X country benchmark the investment qualifies under. See 2X Criteria for more information.
- Nepal
- 2X gender finance
