Kathmandu, May 9:

International Finance Corporation (IFC), a private sector lending arm of the World Bank Group, has agreed to provide a line of credit of two million US dollars to Nepal Industrial & Commercial Bank (NIC Bank).

It is the first time that a Nepali private commercial bank is getting such a credit facility under IFC’s Global Trade Finance Prorgamme.

An agreement to this effect has been signed today by Per Kjerllerhaug, representative of IFC for Nepal, Bangladesh and Bhutan and Sashin Joshi, chief executive officer at NIC Bank.

The credit facility is expected to increase the volume and value of Nepal’s imports and exports while improving access to finance for local businesses, states a IFC press release.

The credit was approved after IFC conducted a thorough due diligence of the bank by its team of experts based in Washington DC and its South Asia regional office, states a NIC bank press release.

The Global Trade Finance Programme supports trade with emerging markets and promotes the flow of goods and services between developing countries.

IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks.

The programme also allows issuing banks to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms, adds the release.

“We are delighted to work with IFC. It will help us expand our network of corresponding banks and create new and valuable business opportunities for our clients in Nepal and around the world,” said Joshi.

Kjerllerhaug of IFC said that the programme is an important mechanism to get local banks into an active global network that facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions on a low-risk basis.