SBL Nepal SME

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 The proposed investment comprises of a US$55 million investment through a 3-year USD denominated senior loan to Siddhartha Bank (SBL or the Bank), to be used exclusively for on-lending to small and medium enterprises (SMEs) in Nepal (the Project) with US$5.5 million carveout for green financing. Of the US$55 million, US$25 million will be through mobilization. SBL is a fast-growing commercial bank with a strong retail and small and medium enterprise (SME) segment. The shortage of liquidity in the financial sector is inherent in Nepal, and the business operations and economic activities of SMEs have been hampered by the COVID-19 pandemic. The proposed facility will assist the Bank to further extend capital to the SME segment and contribute to improving liquidity in the financial sector and support the fast recovery of SMEs impacted by the COVID-19 pandemic, including the underserved rural SMEs.SBL is Nepal’s 6th largest bank in terms of total assets and has grown organically every year in ranking, size and profitability. The Bank is characterized by a large stable deposit base, low cost to income ratio, high retail assets, good asset quality and decent profitability. The Bank has an experienced senior management team with a strong vision to grow the Banks operations profitably while maintaining high levels of corporate governance.For the year ended 16 July 2022, the Bank reported total assets of US$2,033 million, loan book of US$1,424 million, net worth of US$168 million and deposits of US$1,473 million. The Bank has robust asset quality (with a gross non-performing assets ratio of 1.03%) and healthy profitability with return on total assets of 1.31% and return on equity of 15.22%. SBL is rated BBB+ by ICRA.