According to the Bank’s website, the proposed project consists of an unfunded risk sharing facility (RSF) on a 50:50 basis between IFC and Laxmi Sunrise Bank Limited (Bank) in Nepal to support up to US$20 million Nepalese rupee (NPR) equivalent of eligible MSME loans to be originated by the Bank (the Project). IFC’s maximum risk amount will be up to US$10 million NPR equivalent. The Project provides the Bank with a credit risk mitigation instrument, which is unavailable in the market, to help increase access to finance for MSMEs, including women-owned MSMEs (WMSMEs) and climate MSMEs. It is the first time that IFC is doing an RSF in Nepal.Subject to eligibility confirmation, the Project would be processed under IFC’s Small Loan Guarantee Program (SLGP, the Program), a programmatic approach to derisk and scale up financing for SMEs in Nepal and other eligible countries. SLGP is supported by a pooled first-loss guarantee (PFLG) provided by the IDA-PSW Blended Finance Facility.                                                

he proposed project will support Laxmi Sunrise Bank Limited through an unfunded risk-sharing facility (RSF) for its MSME portfolio. The MSME portfolio includes retail and wholesale trading, construction, manufacturing, and sectors such as cement, brick kilns and agri-based production with both short term and long-term exposure. The portfolio may also include renewable energy sub-projects. The main E&S risk and potential impacts of this investment relate the activities of the MSMEs, their ability to manage these risks and impacts, and the Banks capacity to identify and manage these E&S risks and monitor MSMEs’ E&S performance in line with IFC’s applicable E&S requirements.

Hence, the E&S risk of the proposed investment is medium, and the Project is categorized as FI-2 according to IFC's Policy on Environmental and Social Sustainability.

The proposed project consists of an unfunded risk sharing facility (RSF) to Laxmi Sunrise Bank Limited. IFC will cover 50% of an up to US$20 million equivalent portfolio consisting of eligible loans to SMEs, resulting in an IFC exposure of up to US$10 million equivalent.

The Bank’s largest shareholder, Laxmi Corp Nepal Pvt. Ltd, which is fully owned by Ms. Priya Agrawal, holds 7.78% of the equity. Other significant privately-owned institutional shareholders include Citizen Investment Trust (CIT), a publicly listed state-owned enterprise (SOE), holding 4.65% of LSL.

Laxmi Sunrise Bank Limited
Piyush Raj Aryal
Chief Financial Officer
+977-1-4544684
piyush.aryal@laxmisunrise.com
Laxmi Sunrise Bank Limited, Laxmi Complex, Hattisar, Kathmandu Metro – 1, Kathmandu, Nepal

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