Outcome 1: Regulators create framework conditions that attract and facilitate domestic and foreign investment.

Outcome 2: Financial institutions and Private Equity Venture Capital firms mobilize increased capital targeted at underserved SMEs.

Outcome 3: Financial institutions utilize improved credit infrastructure to develop financial products for underserved SMEs.

Risultati principali attesi:  

Output 1.1. Federal authorities have increased clarity on regulatory and policy gaps hindering investment mobilization.

Output 1.2. Sector specific reforms enacted to enhance investment climate and attract domestic and foreign investor.

Output 2.1. FIs and PEVCs adopt sustainable finance practices, client protection pathways and prioritize impact.

Output 2.2. FIs and PEVCs strengthen their investment proposition and management competency to attract funding.

Output 3.1. DCGF designs and pilots new credit guarantee products.

Output 3.2. Credit Information Bureau improves SMEs’ credit assessment visibility.

Risultati fasi precedenti:   This is a single-phase project that builds on previous initiatives. SDC’s experience in supporting SMEs to access finance shows that, without adequate incentives for the financial institutions and a more robust financial sector ecosystem, the market will not effectively channel capital to SMEs. These enterprises are viewed as high-risk and costly to serve due to their small financing need and lack of collateral. UDAYA project set up an innovative provincial risk-reduction mechanism that encouraged banks to meet the financing needs of SMEs in Koshi. Similarly Invest for Impact Nepal unlocked USD 195 million in Development Finance Institutions investment into banks, with clear requirements to channel funds to SMEs. Engagement with the World Bank was effective in pursuing regulatory reforms that streamlined foreign investment approvals. These results have validated the need for structural reforms in the financial ecosystem to unlock access to finance for SMEs.