KATHMANDU: The World Bank’s Board of Executive Directors has approved a $95 million operation to expand access to finance for over 100,000 small and medium enterprises (SMEs) in Nepal, aiming to boost job-led growth.
David Sislen, World Bank Country Division Director for Maldives, Nepal, and Sri Lanka, said the operation will strengthen Nepal’s Deposit and Credit Guarantee Fund (DCGF) by expanding risk-sharing, enhancing financial sustainability, and introducing guarantee products for underserved groups, including women-led businesses.
The initiative will reduce transaction barriers, increase financial inclusion, and help integrate MSMEs into regional and global value chains. It also builds on reforms under the World Bank–financed Financial Sector Stability and Finance for Growth Development Policy Credit series, concluded in 2024, which emphasized access to finance for underserved segments.
The project will invest in technology and the institutional capacity of the Credit Information Bureau of Nepal (CIBN), broadening data coverage, integrating alternative data sources, and improving data security. The International Finance Corporation has supported CIBN in these efforts.
Sabin Raj Shrestha, Senior Financial Sector Specialist and Task Team Leader, noted that limited collateral and credit histories have long constrained SMEs’ access to affordable finance. “The DCGF will be strengthened through upgraded management systems, improved claims settlement, and transition to risk-based pricing and first-loss coverage,” he said.
The project aligns with the Government of Nepal’s second Financial Sector Development Strategy, recently approved.
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