Kathmandu: NMB Bank has secured a USD 12 million investment deal with the Swiss Investment Fund for Emerging Markets (SIFEM). The deal marks the first-ever SIFEM investment in Nepal, and also the first instance of cooperation between SIFEM and the Swiss Agency for Development and Cooperation (SDC) to enable such an investment.
Nepal is a focus country of Switzerland’s development cooperation. The cooperation between SIFEM and SDC by leveraging expertise and synergies between Swiss institutions to advance development in Nepal is an important milestone in Switzerland’s longstanding partnership with Nepal, reads a joint statement by NMB Banak and Embassy of Switzerland.
The deal also further reasserts the commitment of NMB Bank towards acquiring diversified fund sources to bolster its unique brand of sustainable banking, an event especially pertinent and important given the current market scenario.
The investment deal was signed on November 28 between SIFEM and NMB Bank, with SDC extending credit enhancement to SIFEM on a risk-sharing basis, mainly to cover macroeconomic risks.
Under the terms of the deal, the SIFEM investment will be utilized towards lending to local Micro Small and Medium Enterprises (MSMEs), providing much-needed access to finance and contributing to the development of the financial sector, preserving jobs, and boosting the resilience of the local economy.
Ambassador of Switzerland to Nepal Elisabeth von Capeller commented: “Swiss Investment Fund for Emerging Markets’ debt investment in NMB Bank Limited marks the beginning of a new chapter in Swiss-Nepal cooperation. This investment will support increased access to finance for Nepali Micro Small and Medium Enterprises—the key drivers of Nepal’s economy.”
CEO of NMB Bank Sunil KC highlighted the importance of this deal in the current challenging market scenario: “This investment deal, which marks the first SIFEM investment in Nepal, provides further drive to our commitment towards diversified fund sources and investing in the real economy sectors. In these challenging times, this deal will ensure that small businesses have access to uninterrupted cash flow to keep their businesses going.”
NMB Bank’s investment deal with SIFEM is a continuation of its strategy to foster alliances with international stakeholders to diversify its fund sources. In the past, the bank has successfully secured repeat debt funding from the International Finance Corporation and from various other international lenders such as CDC Group, the OPEC Fund for International Development, and Symbiotics.