IFC's $56 million loan to Global IME Bank

Feb Thu 2024 02:28:17

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IFC's $56 million loan to Global IME Bank

Kathmandu. The International Finance Corporation (IFC), a member of the World Bank Group, has signed an agreement to invest 56 million US dollars in Global IME Bank Ltd. This investment will be mobilized to increase financial access to small and medium enterprises, including businesses run by women, and to support climate-friendly projects.

The purpose of this investment is to provide financial access to small and medium enterprises to help them become competitive in the market, improve financial inclusion, create jobs and help achieve climate goals.

IFC's biggest ever investment and deployment in Nepal's financial sector will help Global IME Bank to support small and medium businesses, enterprises affected by the Covid-19 pandemic, women-owned small and medium enterprises and enterprises in rural areas.

This investment by IFC will make a special contribution to efforts to reduce the impact of climate change in Nepal by increasing access to climate finance in various sectors including clean transportation, climate-smart agriculture and solar projects.

Fifty percent of this loan will be equally allocated by Global IME Bank to investments in the climate and gender sectors for small and medium and retail customers. The remaining 50 percent will be used to provide loans to small and medium enterprises.

This is the first time that any development financial institution in Nepal has provided gender finance to any bank. Small and medium enterprises, the backbone of Nepal's economy, have contributed 22 percent to the country's gross domestic product and have employed more than two million people. However, 44 percent of SMEs still face barriers to access to finance. This gap is about 3.6 billion dollars. The situation is even weaker in women-owned small and medium enterprises. Statistics show that about 52 percent of women-owned small and medium enterprises have limited access to finance.

Climate finance is of particular importance to meet the goal of zero emissions by 2045 for Nepal, which ranks tenth among the countries most affected by climate change in the Global Climate Index (2021).

Acting Governor of Nepal Rastra Bank Dr. Neelam Dhungana Timsina said that Nepal Rastra Bank would be very happy to bring foreign investment to Nepal and expressed the promise of Nepal Rastra Bank's support for that.

Similarly, Global IME Bank President Chandra Prasad Dhakal said that cooperation with IFC has helped the bank to become competitive at the national and international level. He said that this loan agreement with IFC will help in the development of small and medium enterprises in Nepal.