Kathmandu, May 4

The International Finance Corporation (IFC), a member of the World Bank Group, has agreed to assist Nepali banks and financial institutions through Nepal Rastra Bank (NRB) to adopt improved environmental and social risk management practices to strengthen their portfolio performance, generate business opportunities and boost competitiveness in the region.

“Improved risk management practices will help minimise potential risks for financial institutions and will create increased access to financing for businesses with strong environment and social performance,” reads the IFC statement

issued today.

As part of this programme, IFC will assist NRB in adopting a robust Environmental and Social Risk Management Guideline and promoting its adoption by financial institutions in Nepal.

“At a workshop held here today, senior representatives from government, the financial sector, and international organisations came together to share information, propose ideas, and build a consensus on how Nepal’s financial sector can better identify, manage and mitigate risks,” as per the IFC statement.

“We want to help financial institutions effectively manage environmental and social risks associated with the projects they finance and increase support to businesses that are greener, climate-friendly and socially-inclusive,” the statement has quoted NRB Deputy Governor Shiba Raj Shrestha as saying.

“It is vital that financial institutions come together to establish an effective and robust environmental and social management system.”

As a member of IFC’s Sustainable Banking Network (SBN), NRB also benefits from the experience and knowledge of other members. The SBN works with associations and regulators to level the playing field for banks and encourage green investment. To date, 15 SBN member countries have launched sustainable finance polices, guidelines and roadmaps.

“Financial institutions can strengthen their portfolio by better assessing risks during loan or investment appraisal, when considering projects,” the statement has quoted Rehan Rashid, resident representative of IFC Nepal, as saying. “IFC has been a long-term partner for Nepal’s financial sector. We help strengthen risk management, enhance competitiveness, and support cross-border expansion by helping improve best practices in environmental and social standards, including Equator Principles and IFC’s Performance Standards.”