Invest for Impact Nepal—Unlocking Opportunities for a Stronger and Resilient Economy
In Nepal’s transformative era, Invest for Impact Nepal (IIN) takes the lead, building platforms for enhanced business and investment environments. By providing strategic investment readiness support, IIN is facilitating increased foreign and DFI investments, bolstering economic growth, job creation, and resilience. This includes strengthening the access to innovative finance for SMEs via investments across the financial services industry.
Investing in Nepal’s Future Markets Resilience
Nepal dreams of not just economic growth but of prosperity that reaches every corner of its diverse landscape. Within this ambition, Invest for Impact Nepal (IIN) emerges as a pioneering initiative—a collaborative effort between Development Finance Institutions (DFIs) and Development Partners, which has supported the upward trend in DFI investments through financial institutions and other sectors. This strategic alliance continues to unlock new investments, fostering inclusive and sustainable economic growth in Nepal. Implemented by Cadmus, the British International Investment (BII), the Dutch Entrepreneurial Development Bank (FMO), and the Swiss Agency for Development Cooperation (SDC) fund this comprehensive initiative to reshape Nepal’s economic landscape.
On Access to Finance for Women Entrepreneurs
Despite small and medium enterprises (SMEs) holding the potential to elevate Nepal to a Middle Income Country, substantial challenges persist. A comprehensive approach is essential to unleash the full potential of SMEs, particularly addressing the hurdles faced by women entrepreneurs. Despite the vital role SMEs play in driving the economy and generating income, women entrepreneurs, in particular, struggle to secure financing. IIN through its industry wide collaboration is working with the Nepal Bankers’ Association to lead the dialogue on sustainable finance and ensure such investments are more impactful and transformative.
In an event on November 6, 2023, with Development Partners and representatives from commercial banks and private equity funds in Kathmandu, attendees acknowledged that key barriers to women’s access to finance include social norms, gender insensitivity, banking practices, and bureaucratic hurdles. Private equity firms can serve as alternatives to meet financial needs, emphasizing the importance of directing investments toward women-owned SMEs. The discussions, moderated by IIN’s CEO, Bibek Shrestha, included proposals for collective financing for a group of women entrepreneurs in a green industrial park in Kavre district. The event also highlighted the need for the banking sector to create a more supportive environment for women entrepreneurs, emphasizing their role as essential contributors to both the country’s economy and families.
Innovation in SME Financing
IIN, in collaboration with Nepal Bankers’ Association and Nepal Private Equity Association, led a seminar on November 7, 2023, that emphasized the imperative of bolstering Nepal’s digital infrastructure to benefit SMEs. During the seminar, stakeholders collectively endorsed that a transition to a digital financing platform that allows for deeper understanding of the businesses transactions could lead to a shift from collateral based lending to cash flow based SME financing. Dr. Matthew Gamser, the former founding CEO of the Global SME Finance Forum (managed by the International Finance Corporation), highlighted the potential of technology as a catalyst for innovations in SME financing. Regulatory authorities, represented by the Governor of Nepal Rastra Bank and the Chairman of the Securities Board of Nepal (SEBON), both proposed the need for innovative approaches to SME financing in Nepal while aligning the official definition of SMEs with international practices.
Cadmus’ Forward Commitment
In recognition of wider collaboration with investment ecosystem stakeholders, IIN was honored with the “Enablers of Entrepreneurship” award by the Confederation of Nepalese Industries at their Start-Up Fest 2023.
Looking ahead, Cadmus is committed to advancing the impactful work of Invest for Impact Nepal, particularly focusing on engaging with SMEs, including women entrepreneurs, for inclusive investment through financial institutions and private equity funds. To achieve this goal, IIN is providing bespoke technical assistance to private equity funds and financial institutions, preparing them for DFI investment readiness that will ultimately benefit SMEs.
About Invest for Impact Nepal
IIN is a collaborative platform established and funded by British International Investment (BII), the Dutch Entrepreneurial Development Bank (FMO), and the Swiss Agency for Development Cooperation (SDC) to complement existing efforts to attract DFI investment to support private sector growth in Nepal. The IIN initiative commenced in February 2021 to research and understand the investment market and ecosystem constraints. Since August 2022, it translated these findings into implementation. This phase of the program will run until July 2025.
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