The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, recently announced that it extended a USD 5 million trade facility to Laxmi Bank, a Nepalese commercial bank that was established in 2002, to support the development of small businesses and international trade opportunities in Nepal. Additionally, IFC will provide advisory support to Laxmi Bank in the area of risk management.
Laxmi Bank will also join IFC’s Global Trade Finance Program (GTFP), which guarantees the trade-related payment obligations of approved financial institutions. Kyle Kelhofer, IFC’s country manager for Bangladesh, Bhutan and Nepal explains, “Through the Global Trade Finance Program’s bank network, local financial institutions can establish working partnerships with a vast number of major international banks that help broaden access to finance and reduce costs for member banks.”
As of 2009, Laxmi Bank reported total revenue of NPR 1.2 billion (USD 17 million) and operating profit of NPR 338 million (USD 4.7 million).
By Julie Moksim, Research Associate
About the International Finance Corporation (IFC): The International Finance Corporation (IFC) is a member of the World Bank Group that was created to support private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses and services. IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reported net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent, total investment mobilization of USD 18.4 billion and 528 projects.
About Laxmi Bank Limited: Laxmi Bank Limited is a commercial bank that was established in Nepal in April 2002. In 2004, Laxmi Bank merged with HISEF Finance Limited, a Nepalese finance organization, in what some have called the first corporate merger in Nepal. The bank’s major shareholders include a group of Nepali businesses, with a 55-percent stake, and Citizen Investment Trust, a Nepalese finance institution, with a 9-percent stake. The remaining shares are held by the general public. As of 2009, Laxmi Bank reported total revenue of NPR 1.2 billion (USD 17 million) and operating profit of NPR 338 million (USD 4.7 million).
Sources and Additional Resources:
International Finance Corporation (IFC) Press Release: “IFC Trade Finance Facility to Nepal’s Laxmi Bank to Support Small Businesses”, March 28, 2011, http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDoc…
MicroCapital.org Brief, March 15, 2011: Rural Microfinance Development Centre (RMDC) Offers Seed Funding to Expand Microcredit into Remote Regions of Nepal, https://www.microcapital.org/microcapital-brief-rural-microfinance-development-centre-rmdc-offers-seed-funding-to-expand-microcredit-into-remote-regions-of-nepal/
MicroCapital’s Microfinance Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Int…
MicroCapital’s Microfinance Universe Profile: Laxmi Bank Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lax…
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