Kathmandu, 4 Feb: The World Bank has announced that it will provide Nepal with financial assistance of approximately NPR 14 billion (USD 95 million) to expand access to finance for around 100,000 small and medium-sized enterprises (SMEs). According to a press release issued by the World Bank, the decision was approved at a meeting of its Executive Directors’ Board.
The assistance will be provided under the Sustainable and Inclusive Finance Project. This project is designed as a continuation of the World Bank’s earlier Financial Sector Development Policy Credit (DPC) series, which aimed to strengthen financial sector stability and promote economic growth in Nepal. The first phase of this policy credit series was successfully completed in 2024, laying the groundwork for further reforms and investments in the country’s financial system.
The latest project will place particular emphasis on strengthening technology and institutional capacity at the Credit Information Bureau. By improving data quality, digital systems, and institutional effectiveness, the project seeks to enhance credit assessment processes and reduce information gaps that often limit access to finance for small and medium-sized businesses. The World Bank noted that the project is closely aligned with Nepal’s Second Financial Sector Development Strategy, which was recently approved by the Government of Nepal.
David Sislen, the World Bank’s Country Director for Nepal, Maldives, and Sri Lanka, stated that the project will help increase the risk-bearing capacity of the Credit Guarantee and Deposit Insurance Fund, improve overall financial stability, and introduce new guarantee schemes targeted at women-led enterprises. These measures are expected to address structural challenges faced by entrepreneurs, particularly those who lack sufficient collateral or a formal credit history.
“Simplifying access to finance and reducing barriers in financial transactions will expand financial inclusion,” Sislen said. “The project will also support the integration of small and medium-sized enterprises into regional and global value chains, promote job creation, and contribute to private sector–led development in Nepal.”
Sabin Raj Shrestha, Senior Financial Sector Specialist for the World Bank’s South Asia region, highlighted that limited collateral and weak credit histories remain major obstacles preventing SMEs from accessing affordable finance. He explained that the project will enable the Credit Guarantee and Deposit Insurance Fund to upgrade its management information system, improve the effectiveness of claim settlements, and implement a risk-based pricing system.
Overall, the initiative is expected to play a crucial role in strengthening Nepal’s financial ecosystem, promoting inclusive growth, and empowering SMEs—particularly women-led businesses—to contribute more effectively to employment generation and long-term economic development.
