World Bank approves $95M to expand SME financing in Nepal
The World Bank has approved a $95 million financing operation to expand access to credit for more than 100,000 small and medium enterprises (SMEs) in Nepal, with the program aimed at supporting job-led growth and strengthening financial inclusion.
According to the World Bank, the Sustainable and Inclusive Finance Project will strengthen Nepal’s Deposit and Credit Guarantee Fund by expanding risk-sharing, improving financial sustainability, and introducing new guarantee products for underserved segments, including women-led enterprises. Mr. David Sislen, Country Division Director for Maldives, Nepal and Sri Lanka at the World Bank, said the operation is expected to ease access to finance, reduce transaction barriers, and support the integration of micro, small and medium enterprises (MSMEs) into regional and global value chains—helping drive private sector–led growth and job creation.
The project will also invest in technology and institutional capacity at the Credit Information Bureau of Nepal to expand data coverage, integrate alternative data sources, and strengthen data security and privacy. The World Bank said the International Finance Corporation has been supporting CIBN in this area.
“Inadequate collateral and limited credit histories have long constrained SMEs’ access to affordable finance while limiting lenders’ ability to accurately assess credit risk,” said Mr. Sabin Raj Shrestha, Senior Financial Sector Specialist for the South Asia Region and Task Team Leader for the operation. He said the DCGF will be strengthened through upgrades to its management information system, improved claims-settlement efficiency, and a shift to risk-based pricing and first-loss coverage.
The World Bank said the project builds on reforms backed by its Financial Sector Stability and Finance for Growth Development Policy Credit series concluded in 2024, and aligns with the Government of Nepal’s second Financial Sector Development Strategy.
