27742 - Nirdhan MFB

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Summary of Proposed Investment

Project Number

27742

Company Name

NIRDHAN UTTHAN LAGHUBITTA BITTIYA SANSTHA LIMITED

Date SPI Disclosed

May 14, 2009

Country

Nepal

Industry

Financial Markets

Projected Board Date

Jul 15, 2009

Status

Active

Sector

Microfinance and Small Business - Non Commercial Banking

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jan 21, 2010
Signed : Jun 13, 2010
Invested : Dec 20, 2010

Project Description

Nirdhan Utthan Bank Ltd. (“NUBL” or “Nirdhan”), a microfinance bank, commenced operations in 1999 by taking over the microfinance activities of Nirdhan NGO. NUBL is one of Nepal’s largest Micro Finance Development Banks (“MFDB”) with an outreach of nearly 110,000 clients and outstanding loans of approximately $13 million. It offers a wide range of loan products, deposit products, micro insurance and remittance.

IFC proposes to invest up to $0.40 million equity for an up to 15% stake in Nirdhan Utthan Bank Ltd to provide a stable funding source in these turbulent times. An advisory services package through SEDF to strengthen institutional capacity is to be implemented in tandem with the proposed equity.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	0.26

Development Impact

The development impact of the project is envisaged to be the following:

As one of first foreign investments since the cessation of hostilities, this project is envisaged to promote investor confidence in Nepal.
This project will help Nirdhan’s growth plans over the medium term through financial and capacity building support.
Nirdhan will serve as the industry model on service delivery, corporate governance, institution-building elements such as risk management, internal controls that IFC’s advisory support will focus on.

This project involves IFC’s support for the business of microfinance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Nirdhan will be required to:

- Develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance exclusion list
- Identify qualified persons to manage and implement the procedure
- Demonstrate commitment and resources to implementing the procedure
- Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions
- Submit a periodic report to IFC as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Dr. Harihar Dev Pant,
CEO,
Himali Path, Siddharthanagar-7, Bhairahawa, Rupandehi, Nepal.
Telephone No: +977-71-523764/ 977-1-4102665
Fax no.: +977-71-521647

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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