NMB Bank Limited

Debt : April 2023

BIO has granted a USD 15 M loan to NMB, a Nepali commercial bank.

Amount

$ 15,000,000.00

Type of investment

Debt

Development impacts

Local economic growth
Financial inclusion
Promotion of ESG best practices

Beneficiary locations

Asia: Nepal

Investment field

Financial Institutions

Activity

KK.64.190 Commercial banking

Organisation

NMB Bank Limited

Website

https://www.nmb.com.np/

Domicile

Nepal

NMB started its operations in December 1996 and became a commercial bank in May 2008. It is now a leading commercial bank in Nepal, counting ~47,000 clients and 1.6 M depositors, operating through 201 branches all over the country, employing 1,950 staff.

The bank offers a wide range of products and financial services, including loans, deposits, trade finance, remittances, cash management, corporate banking, project financing, etc. The average loan size is around 30,000 USD, but varies greatly across segments.

NMB has become a leader in providing lending services to MSMEs, but also to the agriculture, renewable energy and microfinance sectors. The bank is a frontrunner in terms of digitalization, good corporate governance practices and E&S management.

Development impacts

Local economic growth
MSMEs constitute 98.8% of all businesses and 80% of employment in Nepal. Credit to MSMEs is part of the core strategy and positioning of NMB. MSME clients represent 32% of the bank's total portfolio.

BIO's funding will be earmarked to the growth of the MSME portfolio, but also to agri, renewable energy and microfinance lending.
Financial inclusion
Over the last 5 years, NMB completed acquisitions which allowed the bank to expand its outreach significantly with a presence in all 7 Provinces of the country. NMB has 33 branchless banking points for deposits in remote areas and plans to add more going forward.

NMB serves population in rural areas through its microfinance subsidiary, which is present in 68 out of 77 districts, counts with 149 branches, 500+ employees and has around 50,000 borrowers with an average loan size of USD 1,100 (the majority of which group lending to women).
Promotion of ESG best practices
NMB is a pioneer in E&S practices and plays a leading role in spreading E&S risk management good practices in the country.

E&S Impact

NMB has recently implemented their newly developed Environmental and Social Management System (ESMS) and is in the process of completing the review of their portfolio. NMBs is developing their E&S capacity which has been identified as their main area of improvement.

Situation at the time of investment

NMB has a comprehensive ESMS developed with the support of Technical Assistance from FMO and BII in 2021. The ESMS implementation is still at the early stages but is supported by dedicated tools and an E&S team. NMB has shown full commitment to E&S aspects and is looking to develop a Climate Change strategy.

Risk Category: A