Sustainable economic development in rural areas

completed

The aim of the FC module is the sustainable development and expansion of a target group-appropriate and high-quality loan portfolio for (agricultural) micro, small and medium-sized enterprises (MSMEs) in rural areas of Nepal through partner financial institutions (PFIs). The overarching development policy objective is to make a contribution to improving the entrepreneurial environment for sustainable and socially balanced economic development as well as to secure income and secure and create jobs in Nepal. The indirect target group is primarily MSMEs operating in rural areas, who should receive improved access to financial services and advice through the project. The employees of the supported MSMEs and their families also benefit indirectly. The immediate target group are two selected Nepalese banks - the Global IME Bank and the Om Development Bank (since the end of 2019 NMB Bank) - which provide financial services for MSMEs. The FC grant of A total of EUR 9.0 million is intended to support the selected banks in expanding their MSME lending in rural areas in the so-called missing middle segment (200,000 to 4,000,000 NPR). The FC grant is to be used to counter-finance an investment measure worth EUR 7.0 million (refinancing line) and for an accompanying measure worth EUR 2.0 million. The accompanying measure is intended to strengthen the institutional capacities and know-how of the partner financial institutions, particularly in the areas of rural MSME and agricultural financing as well as MSMEs (especially in the area of basic financial education).