The World Bank’s Board of Executive Directors has approved a $95 million operation aimed at expanding access to finance for more than 100,000 small and medium enterprises (SMEs) and supporting job-led growth in Nepal.
The project will strengthen Nepal’s Deposit and Credit Guarantee Fund (DCGF) to expand risk-sharing, enhance financial sustainability, and introduce new guarantee products for underserved segments, including women-led businesses, said David Sislen, World Bank Country Division Director for Maldives, Nepal, and Sri Lanka. He noted that easing access to finance and reducing transaction barriers will broaden financial inclusion, support SME integration into regional and global value chains, and foster private sector–driven growth.
Known as the Sustainable and Inclusive Finance Project (SIF), the initiative builds on reforms under the World Bank–financed Financial Sector Stability and Finance for Growth Development Policy Credit series, concluded in 2024, which prioritized access to finance for underserved groups.
The project will also invest in technology and institutional capacity at the Credit Information Bureau of Nepal (CIBN) to expand data coverage, integrate alternative data sources, and strengthen data security and privacy, with support from the International Finance Corporation. It aligns with Nepal’s recently approved second Financial Sector Development Strategy.
Addressing longstanding barriers such as inadequate collateral and limited credit histories, the project will upgrade DCGF’s management information system, improve claims-settlement efficiency, and transition to risk-based pricing and first-loss coverage, said Sabin Raj Shrestha, Senior Financial Sector Specialist for South Asia and Task Team Leader for the operation.
