Small, medium businesses get lifeline
The group One to Watch, with support from the Swiss Agency for Development and Cooperation (SDC), and in partnership with NMB Bank and Laxmi Bank, has launched the ‘Covid-19 MSME Fund Nepal to provide bridge financing for small and medium businesses to cope with the crisis.
“In unprecedented times like these, the Fund will leverage One to Watch’s expertise in investment and business development, its robust network of investors and entrepreneurs to identify and support high-impact SMEs,” said Suman Joshi of One to Watch. He added that the initiative could be a pilot that can be scaled with participation from more bank partners”,
The Fund will support Micro, Small and Medium Enterprises (MSMEs) in Nepal to meet working capital needs and business development services to be able to retain employees, preserve business continuity, and build resilience. The Fund is expected to support up to 100 MSMEs continue their businesses and help them retain up to 1,000 jobs.
The Fund will provide collateral-free loans to MSMEs that are evaluated to have the potential to bounce back based on a pre-determined set of criteria. It will pay interest on such loans for up to 18 months, and some of them will also be provided with business development support that are tailored to meet the needs of beneficiary enterprises.
“Micro, Small and Medium Enterprises are the backbone of Nepal’s economy. They employ a large share of the workforce and are drivers of innovation and new job creation. Their rebound, therefore, will set the foundation for overall economic recovery,” said Elisabeth von Capeller, Ambassador of Switzerland to Nepal.
Ajaya Bikram Shah, CEO of Laxmi Bank said he was hopeful the collaboration would directly benefit credit-worthy smaller entrepreneurs who require access to bank loans in order to sustain their businesses and livelihoods during an economy under stress.
“We believe that MSMEs need special attention and support at this point in time and this sector will play a key role in helping the economy revive and regain momentum over the medium and long term," he said.
CEO of NMB Bank Sunil KC agreed that MSMEs are key drivers for sustainable growth of Nepal’s economy, but were also the most vulnerable and facing losses.
He added: “To support their revival plan, NMB is committed to providing collateral-free loans to those highly impacted by the current crisis.”