Original disclosure @ IFC website
Updated in EWS Sep 4, 2022
Disclosed by Bank May 17, 2022
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According to IFC, the proposed investment is a 3-year US$ senior loan of up to US$20 million to Sanima Bank Limited (Sanima or the Bank), the 18th largest commercial bank in Nepal with the total assets of US$1.5 billion as of January 2022, with the proceeds exclusively used for on-lending to small and medium enterprises (SMEs) in Nepal (the Project). The Project is expected to contribute to improving liquidity in the financial sector and supporting the fast recovery of SMEs impacted by the COVID-19 pandemic, including the underserved rural SMEs. The Project is also a continuation of IFC’s systematic engagements in Nepal to improve the inclusiveness, competitiveness and sustainability of the financial sector in the country.
Project level outcomes
Stakeholder effects: Increased access to finance for SMEs: SMEs in Nepal suffer from an estimated financing gaps of US$2.9 billion, as SMEs face greater credit constraints especially during periods of tight liquidity. The Project will increase access to finance for underserved and rural SMEs to meet their requirements for working capital and business expansion, and provide them with greater financing certainty to allow them to grow their businesses.
Market creation outcomes Inclusiveness:
The Project will demonstrate to other banks the viability of SME centric business model (as most of the 27 commercial banks have historically focused on the corporate segment) with a particular focus on rural SMEs. This is expected to encourage other banks to adopt the business model and expand their outreach to rural SMEs. The Project's catalytic effects will be augmented by IFC's systematic engagement in Nepal alongside other banks to reach the underserved rural SMEs.
The proposed investment is a 3-year US$ senior loan of up to US$20 million to Sanima, with the proceeds exclusively used for on-lending to SMEs in Nepal.
The promoter group, which consists of 71 individuals and 2 companies, owns 51% of Sanima’s shareholding. The remaining ownership of 49% is held by public shareholders. Sanima has been listed on the Nepal Stock Exchange since 2012.
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