KATHMANDU, NEPAL (30 July 2019) — The Asian Development Bank’s (ADB) Trade Finance Program (TFP) and Laxmi Bank Limited, a leading bank in Nepal, today signed an agreement to provide guarantees to support trade in the country.
“We are delighted that Laxmi Bank has joined the Trade Finance Program as the latest issuing bank member at a time of resurgent economic growth in Nepal,” said ADB Investment Specialist and Relationship Manager for Nepal Ms. Janet Hyde. “This new facility will assist with the country’s reconstruction efforts by supporting trade flows into the country, especially those involving small and medium-sized enterprises (SMEs)."
ADB’s TFP has been operating in Nepal since 2009 and currently works with 2 local partner banks. To date, the program has conducted more than 200 transactions in Nepal, supporting $82 million in trade, and benefiting more than 80 SMEs in a wide range of sectors including agricultural commodities, construction materials and machinery, solar panels, and textiles.
“Laxmi Bank is pleased to join ADB's Trade Finance Program as the third member bank from Nepal after completion of on-site and off-site due diligence of our financials, asset quality, and operations,” said Laxmi Bank’s Chief Executive Officer Mr. Ajaya Shah. “Laxmi Bank is already a major provider of trade finance services for Nepali SMEs, corporates, institutions, and infrastructure projects. Access to this new facility will further strengthen our ability to conduct large value or complex international trade transactions. We believe this will directly benefit our clients by enhancing their acceptance in the international market especially at a time when the country is pursuing economic growth led by private sector investments in national priority sectors.”
Backed by ADB's AAA credit rating, TFP provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia and the Pacific to engage in import and export activities. Since 2009, ADB’s TFP has supported more than 15,000 SMEs across developing Asia—through over 21,000 transactions valued at over $36 billion—in sectors ranging from commodities and capital goods, to medical supplies and consumer goods.
In 2018, TFP grew almost 40% to support $6.2 billion in trade through 4,470 transactions. TFP complements its financial support with knowledge products, including a study that quantifies market gaps for trade finance, initiatives to increase the role of women in banking, efforts to enhance environmental safeguards, and initiatives to fight crime through greater transparency in the global financial system. TFP also provides workshops and seminars to increase knowledge and expertise in matters related to finance, trade, risk management, and fraud prevention.
Laxmi Bank, established in 2002, serves a wide range of customers through its branches and a host of IT-enabled channels. Despite a relatively short history, Laxmi Bank has emerged as a major player across all business lines—retail, midmarket, corporate, infrastructure, and treasury. The bank is widely recognized as one of the best-managed banks in Nepal with high standards of corporate governance culture, risk-management systems, and a strong technology focus. Laxmi Bank’s network includes 110 branches across 48 districts, 2 extension counters and 4 hospital service counters, 131 ATMs, 2,500 remittance agents, and 58 branchless banking agents spread across the country.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.